Dive Brief:
- Truckload volumes are expected to remain muted in Q4, but a meaningful shift could occur in 2026, according to freight broker RXO's Nov. 20 Curve report. The Curve was part of Coyote Logistics until RXO acquired the business last year.
- While October and November outperformed on a year-over-year basis, spot rates will most likely remain stuck, without veering much in either direction, the report said.
- “Though this cycle peak may be atypical to previous — it may very well dip into deflation (without hitting a real trough) — we believe it will rise up to a more traditional peak in 2026,” the report said.
Dive Insight:
Shifting U.S. trade and tariff policies, non-domiciled CDL enforcement and changes to English language proficiency enforcement are all contributing to market pressure.
Demand could still be the major sticking point. American Trucking Associations Chief Economist Bob Costello says it’s possible that disruption on the supply side could lead to a fundamental change in the market. But Michigan State University Supply Chain Management Professor Jason Miller makes the case that demand should be the focal point.
Manufacturing, a key sector for many trucking firms’ freight, is still significantly weak compared to a 2007 peak, according to data compiled by the Federal Reserve. Industrial production output in manufacturing has declined nearly 7.8% compared to 2007, but when hi-tech goods are excluded, it's down 15.6%.
Manufacturing output measures show slow recovery from 2007 peak
“The New Orders component of the Manufacturing PMI — one of the strongest leading indicators for U.S. economic activity — had been improving for five consecutive months, then dropped” in July, RXO said in its report.
Subsequently, that Manufacturing Purchasing Manager’s Index component rose into expansion in August before receding in the ensuing months. PMI November survey data showed new orders contracting for the third consecutive month. Primary metals were one of the few goods experiencing growth in November, per the index.
Sluggish manufacturing is getting help, though. The Federal Reserve reduced the federal funds rate Wednesday by a quarter percentage point, triggering reduced interest rates for the third time this year. The Federal Open Market Committee, which sets the target, said in a statement that economic activity is moderately improving but noted uncertainty remains higher than normal.
“If the Fed continues to cut interest rates, it’s possible we’d see a boost in this index, as businesses would have cheaper cost of capital to invest in and expand their operations,” RXO said.
