Trucking Spot Rates Recover As Mexico Attracts Major Supply Chains

Modest Recovery for Trucking Spot Rates As Nearshoring Benefits Mexico

Nick Terry • October 30, 2024

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Trucking spot rates have stagnated over the last couple of years since the pandemic but began fluctuating in 2024. Most of these were spurred by increasing seasonal demands and the double hurricanes that wrecked parts of the country, including North Carolina, Georgia, and Florida. October has seen the most spike in a long time, but even at that, the rates are still below pre-pandemic levels.

Supply chains across North America are changing their mode of operations as more of them favor a localized process that would avoid the rigors of geopolitical crises and trading wars. Meanwhile, Douglas Horn, a dismissed truck driver, took on the U.S. Supreme Court in a case that could expand civil RICO to false advertising cases.

This edition of our newsletter is packed with intriguing news and trends shaping the freight market.

Trucking Spot Rates See Modest Recovery Amid Mixed Market Trends

According to data from DAT Freight & Analytics, 2024 has seen fluctuating trucking spot rates in the U.S. At its peak, the COVID-19 pandemic caused a surge in demand and spot rates. However, the industry has experienced two years of weaker conditions since then. The national spot rates for dry van, reefer, and flatbed equipment types have seen minimal changes.

This situation might be improving, thanks to disruptions from a strong hurricane season that increased demand in October 2024, signaling an end to the prolonged market contraction. However, rates remain well below the pandemic highs. Despite the surge in spot rates, regional variations were noted, particularly in the Southeast, where hurricanes impacted transportation modes.

Nonetheless, the overall market is still in recovery, with moderate gains and slight upward movement in rates as the industry stabilizes.

Nearshoring Trends Reshape US Supply Chains with Mexico as Key Beneficiary

Recent crises, such as the COVID-19 pandemic and the Panama Canal drought, have driven the shift from globalized sourcing towards more localized, resilient supply chains. A KPMG survey of 250 U.S.-based executives from large companies revealed that major U.S. supply chains are shifting towards nearshoring, focusing mainly on North and South America.

Supply chains in these regions are expected to increase from 59% to 69% over the next two years. As far as countries go, Mexico is taking the lead, increasing from 27% to 36% and replacing Canada as the second-most favored nearshoring destination. While the U.S. share of these operations is projected to drop to 44%, Mexico is expected to rise as a prominent location, increasing from 27% to 36%, replacing Canada as the second-most favored nearshoring destination.

The Mexican preference is attributed to its low labor costs and strategic positioning under the U.S.-Mexico-Canada Agreement (USMCA), making it a key player in replacing China as the largest U.S. import market.

Supreme Court Hears Case on Truck Driver's Firing Over CBD Use and RICO Law Implications

Arguments in the case of Douglas Horn, a truck driver dismissed after failing a marijuana test despite only using a CBD product, were recently heard in the U.S. Supreme Court. According to Horn, the product, Dixie X, was falsely marketed as THC-free, which was wrong and led to his dismissal.

The central legal question is whether Horn's firing qualifies for damages under the Racketeer Influenced and Corrupt Organizations Act (RICO). Horn's legal team claims that the CBD maker's misrepresentation harmed his economic status by causing job loss. If that argument is successful, Horn could receive triple damages under RICO.

However, before that, the Supreme Court must decide whether Horn's job termination and subsequent economic loss constitute "injury" or "damages." The distinction is critical to RICO's applicability. The case is already a bit skewed as Justice Kavanaugh expresses concerns about expanding civil RICO to false advertising cases, potentially setting a broad precedent for future litigation.

GM Invests $625 Million in Nevada Lithium Mine to Secure EV Supply Chain

General Motors (GM) has announced a joint venture with Lithium Americas that will see the former invest $625 million in the Thacker Pass lithium mine in Nevada. The deal replaces the previous agreement and increases GM's total investment in the project to $945 million.

GM expects to leverage this venture to secure domestic lithium supplies crucial for electric vehicle (EV) batteries, aiming to comply with the Inflation Reduction Act and qualify for EV tax credits. The company will receive up to 100% of the lithium produced in the mine's initial phase for up to 20 years. Construction is already underway, and the project is expected to begin production in late 2027.

Volvo Group Faces Profit Decline Amid Lower Truck Demand and Supply Chain Challenges

Decreasing demand for trucks in Europe and America is still impacting truck manufacturers and their balance sheets. The most recent victim is the Volvo Group, which reported a 28.5% drop in Q3 2024 profits, with earnings falling to $956.6 million. Revenue fell 12% to $11.1 billion, while the company's operating margin declined from 13.8% to 12%.

Trucking orders from North America dropped by 50%. For the Volvo Group, that meant a 39% decrease for Volvo Trucks and a 56% drop for Mack Trucks. In addition to declining demand, supply chain delays have further constrained their ability to deliver on time. In response, Volvo has acquired a North Carolina plant to address issues with Mack cab production.

Despite these challenges, Volvo is optimistic about future improvements, especially with Mack Trucks.

Flexibility and Networking Help Small Carriers Weather Freight Market Challenges

Moscoso Express has thrived in a market riddled by nearly two years of stagnancy, which has caused some carriers to exit the industry. The company has remained successful in the now-dreaded market by leveraging technology, staying flexible, and expanding its client base.

Company president Elizabeth Moscoso shared insights on managing business expenses, utilizing technology to find loads, and focusing on short-term, high-demand jobs, like conference logistics, during the Inland Distribution Conference in Chicago. It has also helped them reduce operational expenses.

Networking with other carriers and developing a diverse client base has also paid off and is a key aspect of their resilience. Similarly, Damien Hutchins of CloudTrucks emphasized the importance of building relationships with shippers and expanding from niche services to broader opportunities.

Biden Administration Pledges $2B for Power Grid Resilience Against Extreme Weather

The Biden administration is investing nearly $2 billion to bolster the U.S. power grid against extreme weather and support transmission projects. The funding, distributed by the Department of Energy, will go to 32 projects across 42 states.

This initiative aims to enhance grid resilience, including in areas damaged by hurricanes Helene and Milton. It involves constructing over 300 miles of new transmission lines and upgrading more than 650 miles of existing ones.

The effort comes in response to the growing challenges posed by severe weather on the nation's aging electric infrastructure, as highlighted by Energy Secretary Jennifer Granholm.

Seamless Shipping Solutions 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. At EFS, we offer a broad range of unsurpassed services. These include:

Full Truck Load (FTL): For shipment requiring a dedicated whole truckload.
Less than truckload (LTL): For companies moving multiple LTL shipments to different locations or consolidating LTL goods from other companies to get a lower all-in rate.
Refrigerated Trucking or “Reefer” Transportation: Leveraged to avoid spoilage and damage to temperature-sensitive goods.
Cross Docking: With locations in Shelby, Ohio, Cedar Rapids, Iowa, and Romulus, Michigan, that serve as cross-docks 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.