March Truckload Update

As we approach the end of Q1 2025, the truckload market continues to adjust following a turbulent Q4 2024. Spot rates, capacity constraints, and trade uncertainties are shaping expectations for the months ahead.

Q1 2025 Forecast

DAT forecasts that van rates will have an expected decline within the next month and reefer rates will be bottoming out by the end of March and expected to have an uptick as produce in Salinas begins to ramp up.

In their Market Update, DAT reported that

“We are on track to see more carriers leave then join this month. So it will be a continuation of much of the same”.

SONAR offers their insight - spot rates have shown notable weakness, with the National Truckload Index (linehaul only) decreasing from $1.98 per mile in early January to $1.71 per mile by mid-February. While rates are currently low, the steady spread between spot and contract rates suggests the market may have reached its lowest point and could be entering a recovery phase.

SONAR is predicting a 0.5% to 3% increase in spot rates this quarter. With winter storms throughout most of the US early in Q1, spot rates held their holiday momentum through January.

In SONAR’s Q1 2025 Shipper Rate Report they stated:

“Given recent comments from carriers, shippers appear most concerned with hedging against volatility in the 2025 bid season, and so contract rates are likely to see some modest increases when the changes take effect. We thus anticipate that contract rates will rise 0.5% to 2.5% on a quarterly basis, but rates’ yearly growth should outpace inflation later in the year”.

An unexpected decline in the Outbound Tender Volume has been observed, deviating from the typical February rebound. Factors such as severe winter weather have contributed to this downturn. However, port data indicates a potential recovery in March, with anticipated increases in import levels expected to offset February's softness.

One factor to watch is the impact of the expected 25% tariff on most Canadian and Mexican goods in early March. If enacted, this could temporarily increase cross-border freight demand but is unlikely to drive sustained rate hikes.

Salinas Season and the “Death March”

As we move into spring, Salinas produce season is kicking off around April 6th, with full transition expected by April 20th. This biannual transition of equipment and workers from Yuma to Salinas is something our SVP here at A&Z Trucking , Cody Koehler , refers to as the "death march", a massive convoy of 30-40 trucks hauling equipment between both locations. Some of our own employees, who split their time between our refrigerated warehouses in Salinas and Yuma, take part in this migration.

One thing of note that was mentioned during the conversation between Cody Koehler and the DAT iQ team is that reefer rates out of Western Arizona are down by $0.27 per mile or about 11% which shows how loose of a market Yuma has been. Another concern leading into this produce season was the California wildfires and water restrictions, but as of now, we haven’t seen any reports of major impacts on key growing regions.

Key Takeaways

Capacity is still tight, but some reports suggest this may ease in Q1. Spot rates saw strong Q4 growth, but their direction in Q1 remains uncertain. Trade policies could shift demand patterns, particularly for cross-border freight. Salinas season is ramping up, bringing a significant transition in reefer freight.

With forecasts on where rates are headed, shippers and carriers should stay agile and monitor real-time trends. The coming months will reveal whether Q4’s tightening was the start of a lasting uptrend or just a seasonal spike.

Thank you for reading!

This update uses reliable industry data sources. I do my best to advise on the market and hope that this information can be considered as you formulate your own conclusions. If you would like to contact me about dry and refrigerated transportation, crossdocking, and cold storage solutions, or any other full truckload transportation needs, please reach out to bella.montoya@aandztrucking.com with your questions and comments!