NEW YORK — As global trade patterns fluctuate amid evolving tariff policies and shifting consumer confidence creates economic headwinds, the US freight market faces unprecedented uncertainty.
The latest TD Cowen/AFS Freight Index report serves as a beacon through this fog of uncertainty, providing clear insights into the market's complex dynamics while offering projections about future trends. This authoritative report—jointly produced by New York-based investment firm TD Cowen Inc. and Louisiana-based logistics specialist AFS Logistics LLC—delivers comprehensive analysis across multiple freight modes, with particular focus on tariff impacts and how weakening consumer sentiment may hinder market recovery.
Key Findings at a Glance
Truckload: Q2 2025 rates projected to dip slightly to 5.5% above baseline
Parcel: Pricing strategies becoming more dynamic as carriers compete
LTL: Strong pricing momentum continues despite economic headwinds
Methodology and Data Insights
By combining AFS's vast freight data across transportation modes with advanced analytical techniques including machine learning, TD Cowen and AFS have developed precise models that extract maximum value from the data. Beyond historical trends, the index incorporates current macroeconomic and microeconomic factors—including recent General Rate Increases (GRIs) announced by major parcel carriers that will directly impact market dynamics.
AFS Logistics CEO Andy Dyer noted: "Tariffs have become a boardroom-level discussion with far-reaching consequences. When combined with macroeconomic uncertainty, these factors create heightened market caution and decision paralysis. Domestic transportation continues to face soft demand with no immediate relief in sight."
Sector-Specific Analysis
Truckload: Inventory Strategies Reshaping Demand
The truckload sector saw Q2 2025 rates running 5.9% above the January 2018 baseline, slightly exceeding expectations. This increase stems from multiple factors: shippers pulling forward inventory to mitigate potential tariff impacts, disruptions from wildfires and natural disasters, and ongoing capacity adjustments.
A notable trend is the shift toward shorter hauls (500 miles or less), reducing per-shipment costs to just 5% above pre-pandemic levels—the lowest point in over three years. This reflects growing regional distribution strategies and decentralized inventory placement.
The report forecasts Q2 rates will dip slightly to 5.5% above baseline, marking nine consecutive quarters within the 4.3%-5.9% range—indicating relative stability but requiring close monitoring of influencing factors.
Parcel: Carriers Adopt Dynamic Pricing Strategies
The era of predictable annual parcel pricing changes has ended. Over the past 18 months, FedEx and UPS have implemented more frequent, nuanced pricing adjustments that take effect quickly as they compete for revenue in a soft demand environment.
UPS has introduced numerous changes in early 2025 including revised zone alignments, new invoice fees, increased late payment penalties, and payment processing charges. Both carriers continue adjusting fuel surcharges—with UPS ground surcharges increasing 15% and FedEx's 12% year-over-year despite diesel prices falling 8.4% during the same period.
Q1 2025 saw parcel pricing follow seasonal trends, with GRIs and fuel surcharges driving a 5.2% sequential cost increase per package. However, volume growth remains challenging as carriers optimize ground networks, enabling shippers to shift volume to lower-cost services while facing competition from an expanding carrier landscape—including USPS's new Priority Next Day service in 54 markets.
The Q2 2025 per-package rate index is projected at 3.1%, down 0.3% sequentially and 1.4% year-over-year, indicating near-term market pressures.
Less-Than-Truckload: Resilient Pricing Amid Economic Concerns
Despite economic challenges, LTL pricing maintains strong momentum. Q1 saw GRIs take effect alongside a 4% net fuel surcharge increase per shipment—enough upward pressure to offset shorter hauls and continued low weights, resulting in a 1.5% sequential and 0.5% annual increase in cost per shipment.
The Q2 per-pound rate index is forecast at 63.4%, down slightly sequentially but up 0.7% year-over-year—marking six consecutive quarters of positive annual growth.
Market Outlook and Strategic Implications
As global trade patterns evolve and consumer confidence fluctuates, the TD Cowen/AFS Freight Index provides market participants with critical insights to navigate this complex environment. The report emphasizes that understanding these dynamics—from tariff impacts to shifting distribution strategies—will be essential for developing effective response plans in the coming quarters.