Carriers Take Advantage of Changing Tide in the Freight Market

Carriers Look to Leverage Changing Tides in Trucking Freight Market

adam • November 14, 2024

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Following Donald Trump’s election as president, the freight market has been awash with higher-than-expected demand amid fears that he will spark a tariff war that will slow imports and expose supply chains to disruptions. However, for carriers, the spike in demand has not translated to higher rates because of excess capacity.

In other news, logistics services providers like Averitt Express are poised to take advantage of the nearshoring and reshoring wave. Averitt has expanded its logistics footprint in San Antonio with a warehousing facility in the Texas city to position itself to provide better cross-border logistics operations for businesses moving freight between the U.S. and Mexico.

Continue reading to find out more insights and news taking the freight world by storm this month.

Tariff Uncertainty and Import Surge Drive Demand Shifts

A surge in imports has the domestic freight market bustling with concern and excitement. The industry is experiencing stronger-than-anticipated demand, driven largely by shippers front-loading goods in anticipation of possible tariffs under President-elect Trump’s trade policies. However, for some carriers, the overcapacity that has plagued the industry for so long continues to play a major role in keeping freight rates low.

For these carriers, this means that despite the overall excitement of demand, excess capacity — remnants from earlier economic highs — continues to weigh down rates and dampen industry sentiment. The demand imbalance is compounded by a slowdown in consumer spending and inflation pressures, which began in 2020 and were further strained by the 2022 Russia-Ukraine conflict.

Trump’s proposed tariffs could expedite a shift to “reshoring” in U.S. manufacturing, which is already underway as companies look to reduce dependency on foreign suppliers. In the long term, this trend may boost domestic freight demand. However, should tariffs trigger inflation, further Fed rate hikes could constrain consumer spending and manufacturing output, posing risks to the trucking sector.

Averitt Expands San Antonio Facility to Meet Growing Demand

Averitt Express has expanded its San Antonio facility with a new 85,000-square-foot distribution and fulfillment warehouse along the I-35 corridor. The recent expansion comes in response to a growing demand for cross-border logistics. Situated between major hubs in Laredo and Austin, Texas, the facility includes an expanded cross-dock terminal and a new fueling station that will be ready by next year.

Ed Habe, Averitt’s vice president of Mexico sales, noted that nearshoring is increasing the need for logistics and warehousing services in Texas, especially in regions close to the Mexican border. The San Antonio location, originally established in 2001, is part of a broader Texas-based infrastructure strategy to support U.S.-Mexico trade.

Following recent growth and expansion, the company now operates more than 800,000 square feet of warehousing in Texas, with major locations across key cities, including Laredo, Dallas, and Houston. However, the expansion is not unique to just Averitt Express. It aligns with a growing industry trend that has also seen companies such as Kuehne+Nagel and Uber Freight improve their capacity in Texas to serve increased cross-border and nearshoring needs.

California Aims to Protect Zero-Emission Vehicle Mandate

Following Trump’s victory in the presidential election, there is a general sense in California that his triumph will impede the state’s zero-emission mandate. To mitigate that risk, Gov. Gavin Newsom announced plans for a special legislative session to protect the state’s environmental regulations, including its ambitious zero-emission vehicle (ZEV) mandate.

California’s zero-emission mandate requires all new vehicles sold by 2035 to be electric, hydrogen-powered, or plug-in hybrids. Newsom framed this move as part of California’s commitment to resist federal interference and safeguard environmental standards amid anticipated regulatory rollbacks. State Attorney General Rob Bonta confirmed that California has been preparing for potential legal challenges, with more than 120 lawsuits reviewed from Trump’s previous term as president.

California Republican lawmakers criticized the session as a political maneuver, while Newsom emphasized the state’s dedication to defending its environmental and economic autonomy.

Hydrogen Fuel Cell Trucks Face Adoption Hurdles

Although often lauded as a primary option for zero-emission long haul trucks, the development of hydrogen fuel cell electric vehicles (FCEVs) is progressing slowly, impacting demand and planned carrier shifts. The shift to hydrogen-powered trucks demands complex new designs and extensive infrastructure changes, which industry disruptors like Nikola and Hyzon are leading.

Nikola recently achieved record sales in the hydrogen truck market, with prominent companies such as J.B. Hunt and DHL adopting its trucks. However, infrastructure concerns and high hydrogen costs continue to deter wider adoption, with the hydrogen price still far from a viable range for cost-effective operations.

Established truck makers like Daimler and Volvo Trucks are cautious. Many manufacturers plan to kick-start production of hydrogen trucks later in the decade, while others remain focused on battery-electric technology as a more immediate alternative. As challenges persist, industry experts predict hydrogen FCEVs may serve niche applications rather than dominate the long-haul freight sector in the near future.

Canadian Government Orders End to Port Labor Lockout

The British Columbia Maritime Employers Association (BCMEA) locked out more than 700 International Longshore and Warehouse Union (ILWU) Local 514 members on Nov. 4, following a union-led walkout at major ports. Following this, major ports, including Vancouver and Prince Rupert, experienced significant disruptions in operations, including those in the container, automotive, and breakbulk sectors.

However, the Canadian government has stepped in, imposing final and binding arbitration for labor disputes that have stopped work and ordered an end to the disputes. Labor Minister Steven MacKinnon highlighted the situation’s urgency, noting that negotiations had stalled and dockworkers were locked out in Vancouver, Prince Rupert, and Montreal. He stated that the shutdowns threatened Canadian jobs, economic stability, and Canada’s reputation as a reliable trading partner, with CA$1.3 billion in goods impacted daily.

Covenant Logistics to Gradually Raise Rates Amid Shifting Business Model

Following a shift in the business model, Covenant Logistics Group has implemented multiple rate increases and expects additional hikes next year. CEO David Parker has indicated that the company will aim for a 2-3% rate rise during the current bid season, followed by another 2-3% increase in the latter half of 2025. Despite potential customer pushback on rate hikes, Parker remains confident in Covenant’s customer relationships and the potential to negotiate incremental increases.

The company’s shift toward a model that prioritizes dedicated contracts over spot market exposure has provided more stability for its customers. However, there is a trade-off that limits the company’s flexibility to capture rising rates as market demand cycles upward. CFO Tripp Grant noted that this operational shift, initiated two years ago, has improved Covenant’s profitability and resilience against market volatility, aligning it with industry peers like Schneider National and Werner Enterprises, increasing their share of dedicated business.

Trucking Spot Rate Trends Reflect Seasonal Shifts and Market Stability After Pandemic Boom

Spot rates have been relatively stable in recent months, with fluctuations due to seasonal demand and external factors like hurricanes and labor disputes. Despite this, rates remain well below pandemic-era highs, reflecting a new period of market stability. Flatbed rates have also remained relatively steady at $1.97, but there may be regional variations due to factors like construction activity and commodity shipments.

Data from DAT Freight & Analytics reveals that recent rate increases were modest, with dry van holding steady at $1.65 and reefer edging up for holiday demand to $2.02 as of early November. DAT analysts said that spot market cycles appear to be returning to pre-pandemic patterns, with subtle rate changes influenced by holiday surges, regional disruptions from hurricanes, and a stable volume of load posts across transportation types.

The industry is cautiously optimistic about the future, with some analysts predicting a potential uptick in rates as the economy recovers and demand for transportation services increases.

Navigating the Freight Market with Entourage Freight Solutions

Entourage Freight Solutions stands out with its extensive background and expertise in food service logistics. Our unique approach, honed in the food supply chain, ensures an unmatched service level and extreme attention to detail in meeting all our shippers’ needs.

Our platforms use the latest cloud-based, GPS-enabled technologies. They can track drivers regardless of location, continuously reroute shipments based on the dynamics at play, such as weather or traffic, and account for real-time changes in market rates.

Entourage Freight Solutions offers a broad range of unsurpassed services and end-to-end distribution programs. These include:

Full Truckload (FTL) for shipments requiring a dedicated whole truckload.
Less-than-truckload (LTL) for companies moving multiple shipments to different locations or consolidating goods from other companies to get a lower all-in rate.
Refrigerated Trucking or “Reefer” Transportation to avoid spoilage and damage to temperature-sensitive goods.
Cross-Docking at locations in Shelby, Ohio, Cedar Rapids, Iowa, and Romulus, Michigan, for strategic consolidation, storage, and end-to-end distribution programs.

Request a quote today to see how Entourage Freight Solutions can help with your freight movement and other supply chain needs.

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Tariffs, Trade Policy, and the Great Freight Fallout

By Nick Terry • April 28, 2025

In 2025, trade policy is no longer something that the freight industry can leave on the back burner. Trade policy today is shaping strategy at every level. From tariff escalations and retaliatory duties to sweeping regulatory changes and targeted maritime fees, supply chain leaders are navigating a freight market in which unpredictability is the only constant. Sourcing decisions are shifting, pricing dynamics are unstable, and long-standing operational models are being rewritten in real time. This edition brings together key stories highlighting the growing pressure across logistics channels. Each development points to an industry moving fast, and often reactively, to keep pace with volatile policy decisions. Tariffs Stall US Freight Recovery as Shippers Pause Orders The recent move by the U.S. Trade Representative (USTR) to impose entrance fees on Chinese-built ships calling U.S. ports has only added to the confusion and uncertainty gripping global supply chains and freight operations. Shippers are pausing plans and slashing orders, with truckload volumes, containerized imports, and manufacturing output all showing signs of contraction. Ocean freight spot rates have collapsed: Asia-U.S. West Coast rates have fallen 61% since January to $2,050 per FEU, while East Coast rates have dropped 53.7% to $3,100 per FEU . Blank sailings are rising, with vessels leaving Asia half-empty. Amazon and Five Below are among the major retailers reducing orders from Asia. Container imports jumped 15.3% in 2024, but forecasts now predict a 20-27% decline through the summer. Exporters, particularly agriculture and forestry suppliers, are also squeezed, facing 125% retaliatory tariffs from China. Truckload and intermodal rates remain stagnant, while U.S. factory output fell sharply in March. US Apparel Importers Brace for Long-Term Volume Declines According to Trade Partnership Worldwide, a 124.1% tariff on Chinese clothing and footwear is expected to reduce U.S. apparel imports by 1.6% annually . China still accounts for 41.7% of apparel shipments, leaving limited flexibility for diversion. The American Apparel and Footwear Association (AAFA) is warning of price hikes and mounting infrastructure stress as sourcing pivots toward Vietnam, India, and Indonesia. A looming May 2 deadline for de minimis exemptions could further complicate flows and delay deliveries. Even with a temporary 90-day pause in reciprocal tariffs, the policy uncertainty already affects long-term planning. AAFA CEO Steve Lamar calls the shifting policies “chaotic,” and warned that high tariff pressure will hit both importers and U.S. manufacturers reliant on Chinese components. Port and rail capacity limitations at larger gateways are adding to concerns. Retailers now face rising costs, shrinking margins, and operational delays — all while consumer demand continues to shift rapidly. Freight Pricing Gains Lose Momentum According to the TD Cowen/AFS Freight Index, Q1 truckload rates rose 5.9% above the 2018 baseline, but are expected to decline slightly in Q2. Shippers are responding to tariff threats with aggressive front-loading and shorter-haul routes, driving per-shipment costs to three-year lows. LTL carriers remain focused on profitable lanes and high-quality freight rather than chasing volume. The index forecasts a 0.7% year-over-year increase in LTL rate per pound for Q2 , despite sustained demand softness and macro uncertainty. A key driver behind the softening spot market conditions is a shift to shorter hauls and regionalized distribution, pushing per-shipment costs to their lowest point in more than three years. This trend reflects how retailers and manufacturers are repositioning inventory in response to tariff volatility, as NRF’s Jonathan Gold and DAT analyst Dean Croke noted. Meanwhile, the LTL sector is seeing a 4% rise in fuel surcharges, offsetting lower weights and shorter hauls. With the freight market still under pressure after 26 months of contraction, optimism remains subdued as we enter the midyear period. US Truckload Freight Spot Rates Continue to Fluctuate National benchmark rates have experienced a decline across all categories. As of April 18, dry van decreased by 4 cents to $1.62, reefer by 2 cents to $1.88 , and flatbed by 3 cents to $2.16. This marked the first overall decrease since late January, signaling potential shifts in market dynamics. These changes can be attributed to factors such as tariff uncertainties and tighter capacity, especially affecting the flatbed market. Flatbed rates rely heavily on manufacturing activity in the country, which has been particularly hard-hit by the ongoing trade war with China, and to some extent, with the rest of the world. US Finalizes Tiered Fee Plan Targeting Chinese Ships The U.S. is moving forward with a revised plan to levy voyage-based fees on Chinese-owned and Chinese-built ships calling at American ports. The U.S. Trade Representative (USTR) announced the measure as part of a broader Trump administration effort to counter China’s dominance in shipbuilding and logistics while reigniting domestic ship construction and port infrastructure investment. Starting in six months, Chinese operators will be charged $50 per net ton, with an annual increase of $30 for three years . Non-Chinese carriers using Chinese-built vessels will face lower rates, beginning at $18 per ton or $120 per container, with annual increases. The USTR capped fee applications at five voyages per vessel annually, scaling back its original, more punitive per-port-call proposal after intense industry pushback. The fees are tied to findings from a USTR investigation, which concluded that China’s shipbuilding dominance — producing 29% of global fleet capacity and 70% of all container ships on order — stemmed from unfair trade practices. Exemptions apply to ships arriving empty, those in the Great Lakes or U.S. territories, and some bulk exports. LNG vessel transport restrictions will phase in over 22 years to support U.S. production. China’s largest container carrier, Cosco Shipping Lines, has sharply criticized the USTR’s plan. In a strongly worded statement, Cosco labeled the move as “discriminatory,” and warned it would disrupt global industrial and supply chain stability. Cosco denied allegations from that USTR investigation that claimed China manipulated its shipping and shipbuilding sectors to gain an unfair advantage. The carrier said it upholds “integrity, transparency, and compliance” in global competition and remains committed to ensuring the resilience of international trade. Walmart Investing $6B in Mexico, Central America Store Expansion Walmart of Mexico and Central America will invest $6 billion to open new stores across the region , reinforcing its long-term commitment to growth in Latin America. The expansion will include Bodega Aurrera, Walmart Supercenters, Sam’s Club, and Walmart Express formats, building on a robust network of 3,200 stores across all 32 Mexican states. This latest move echoes Walmart’s earlier $1.3 billion investment in 2016 for regional distribution and operational upgrades. The retailer entered the Mexican market in 1991 with a Sam’s Club in Mexico City. In a statement, Walmart said the new expansion reflects confidence in the region’s economic potential and consumer demand. Globally, Walmart continues to invest aggressively in infrastructure and store development. The company has pledged about $4.5 billion for its Canadian operations and $1.3 billion in Chile to build 70 new stores and a distribution center. In the U.S., Walmart is executing a five-year plan to build or convert more than 150 stores while modernizing 650 existing locations under its “Store of the Future” initiative. Experience Seamless Shipping with Entourage Freight Solutions Entourage Freight Solutions believes in total transparency in the shipping process. That is why we invest in tech solutions that track every shipment extensively, monitor every driver, and extract every bit of efficiency without sacrificing quality. Our state-of-the-art platform utilizes cloud-based GPS tracking to keep you informed, reroutes shipments on the fly to avoid delays, and even responds to real-time market changes to ensure you receive your shipment on time and as soon as possible. Our Services Full Truck Load (FTL): When you need a truck all to yourself. Less-Than-Truckload (LTL): Efficient solutions for multi-stop shipments or combining smaller loads to save on costs. Refrigerated Trucking: Keeping your temperature-sensitive products fresh and safe. Cross-Docking: Strategically located facilities in Shelby, Ohio, Cedar Rapids, Iowa, and Romulus, Michigan, for streamlined consolidation, storage, and distribution. Ready to experience a new level of service and control in your freight shipping? Request a quote today to see how Entourage Freight Solutions can help with your freight movement and other supply chain needs.