Two teams of analysts this week said what trucking executives have been loath to even hint at over the past year: The struggling freight market appears to be nearing a bottom.
In notes to investors, researchers at Stifel led by Bruce Chan (focusing on the truckload market) and at Goldman Sachs led by Jordan Alliger (looking more at less-than-truckload freight) said that carrier exits have brought supply closer to being in equilibrium demand levels that are still soft. The Goldman group said both LTL and truckload dynamics are showing “several attributes that could suggest the bottom is near.”
That, the analysts added, sets the stage for carriers to assert a little pricing power in the quarters ahead.
“We believe tariff changes played a minimal role in rates moving higher in recent weeks,” Chan and his associates wrote. “But the price action corroborates our view of a market nearing equilibrium—and one with rates primed to inflect alongside sustainable demand improvement.”
On the LTL side, Alliger and his team wrote that the exit of Yellow Corp. nearly two years ago has helped reduce capacity enough to the point where the sector is set to enter its next upcycle with fewer trucks than it had going into the last one. That, they added, will produce good margins on the incremental business.
May LTL data looks sluggish
A positive swing in shipments seems set to take a little longer to materialize, though. Three LTL carriers—Old Dominion Freight Line, Saia, and XPO—this week issued mid-quarter updates, and all three said that their shipments count dropped in May versus 2024. At Old Dominion, the decrease was 6.8% while XPO and Saia registered year-over-year drops of 5.0% and 3.2%, respectively.
“Our revenue results for May reflect continued softness in the domestic economy as well as the impact of lower fuel prices on our yields,” Old Dominion President and CEO Marty Freeman said in a statement. “We believe that our market share has remained relatively consistent throughout this extended period of economic softness.”
No one among the carriers or the analysts sees a big jump in demand soon that will put an end to that softness. If anything, Chan wrote, the ongoing back-and-forth around tariffs means demand growth is more threatened now than it was coming into 2025, when most market watchers foresaw only a slow recovery.
With consumers showing signs of pulling back on some spending just as business leaders are doing, there simply aren’t many major catalysts available to the economy. And that, the Stifel analysts say, might make the next freight recovery a little different.
“The more bullish, or those manifesting an end to a long and arduous freight cycle, have begun looking at the truckload group as a high torque vector to an upcycle. Historically, they would be right, we think,” Chan and his team wrote. “But we also think this upcycle will be slower to play out than those in recent memory, with more demand risk and residual supply being a bigger factor.”
