As we move deeper into Q2, the freight market remains in flux—characterized by weak demand, shrinking volumes, and stubbornly steady rates. While everyone’s talking about tariffs, Christopher Thornycroft cuts through the noise in this week’s Redwood Rundown to focus on what really matters: market fundamentals.
Key Takeaways
- Volumes Are Sinking
Freight volumes have dropped to levels not seen since February 2020—before the pandemic began. Despite this, rates remain surprisingly stable. - Rates Aren’t Falling (Yet)
Even with demand softening, national average rates are hovering around $1.70–$1.71 (excluding fuel). Fuel prices have dipped, providing carriers some relief, but upward pressure on pricing remains due to tightening supply. - Capacity Continues to Exit
One of the biggest stories this week is the rapid reduction in capacity. Carriers, particularly in the refrigerated space, are leaving the market. The result? A supply environment that may begin to influence market movement more than demand does—something we’ve only seen a few times in recent history. - Southern Markets May See Shifts First
Keep a close eye on the South. Capacity is coming out of Southern markets like Georgia at a faster clip than Northern regions. This imbalance could set the stage for volatility during roadcheck season and produce season if capacity tightens further.
What to Watch:
- The Basement Is Here – Rates may slip slightly, but we’re near the market floor. There’s far more room for rates to rise than fall if demand rebounds even modestly.
- Southern Tension Building – With fewer trucks available in the South, especially as produce season approaches, watch for sudden capacity crunches.
- April & May Set the Tone – If more capacity exits the market through mid-May, the market could pivot quickly.
For a full breakdown and boots-on-the-ground perspective from Monterrey, Mexico, watch the full Redwood Rundown video.