Chart of the Week: Van Contract initial report of average base rate per mile, National Truckload Index (less estimated fuel costs above $1.20/gal) – USA SONAR: VCRPM1.USA, NTIL12.USA

Contract rates for dry van truckload shipments (VCRPM1) are nearly unchanged from this point in 2024, despite the disruptive forces that rocked supply chains earlier this year. Spot rates (NTIL12), which appeared to be accelerating their rise at the end of 2024, are ending the first half of 2025 slightly below year-ago levels. Both rate indices suggest a trucking market that has stalled in its recovery. What are the takeaways from the first half, and what should we watch for in transportation markets over the next six months?

Freight recession gets an extension

After what looked like a straightforward path toward a much stronger freight market in 2025, transportation service providers are closing out the first half of the year in no better position than they were 12 months ago. While the trade war has played a role, it is not the sole driver of stagnation.

Intermodal began reclaiming market share from truckload, which it had lost during the pandemic, early last summer. Long-haul truckload demand (LOTVI) has collapsed—down 25% year-over-year—as shippers have increasingly opted for slower but cheaper transcontinental shipping. Intermodal capacity has expanded significantly since 2020, and it is far easier to add containers into service. This dynamic is arguably the most significant and unforeseen development in the recent multi-year surface transportation downcycle.

Shippers have also extended their order lead times to account for the unstable maritime sector, as attacks on vessels in the Red Sea have made ocean shipping less reliable. These longer lead times have given shippers more flexibility to move goods once they arrive in the U.S.

Warehousing capacity has tightened and costs have risen as a result of this pull-forward strategy. In this environment, intermodal’s slower transit becomes an advantage, effectively serving as rolling storage. Trucking has increasingly become a short-haul delivery mechanism—the only option for that final leg of freight movement.

Erratic trade policy messaging and implementation have further prolonged and exacerbated these trends, keeping truckload demand depressed and surface transportation rates subdued.

Economic stagnation

So far, we’ve focused on the direct impacts of geopolitical tensions and trade policy on supply chains. But at the end of the American economy is the consumer. Companies can stockpile all the goods they want, but if no one is buying them, it doesn’t matter.