LTL Industry Overview – Executive Chairman of the Board and CEO Chris Jamroz
Challenges arise for U.S. LTL Industry
“The economic landscape is becoming increasingly uncertain and complex, largely due to the resurgence of protectionist trade policies”
– Chris Jamroz, Executive Chairman and CEO, Roadrunner
U.S. LTL Industry Faces Relentless Series of Challenges in Q1 2025
The U.S. LTL (less-than-truckload) industry faced a relentless series of challenges throughout Q1 2025. Severe winter storms caused widespread disruptions, leading to rolling shutdowns of roughly a quarter of national LTL carrier terminals for 13 working days in January and 10 in February. March compounded the turbulence, posting the lowest volume for that month since the COVID era—and, prior to that, the Great Depression—defying a two-decade trend of seasonal spikes in early spring.
Looking ahead, the economic landscape is becoming increasingly uncertain and complex, largely due to the resurgence of protectionist trade policies. Escalating tariffs and renewed trade tensions are disrupting global commerce, eroding business confidence, and threatening both U.S. exports and the affordability of imports. The implications for the domestic supply chain are profound. The uncertainty ripples through global supply chains as some shippers are pulling inventory replenishments forward while others stand back cancelling seasonal orders pending future trade policy clarification.
Stifel Nicolaus is warning of an imminent “freight vacuum,” and leadership at the Port of Los Angeles/Long Beach—the nation’s busiest seaport—is forecasting a 30% drop in inbound container volumes. With 90% of Chinese imports entering the U.S. through this gateway, the stakes are high. Exacerbating this is the surge in blank sailings from China: according to Drewry, 198 sailings across major lanes (Transpacific, Transatlantic, and Asia–Europe) were canceled in March and April alone. JOC estimates that 68 of those occurred in April, suggesting about 130 in March—surpassing even the worst months of Q2 2020 during COVID’s peak.
We are closely monitoring forward-looking indicators such as the ISM, CCI, and UMCSI for early signals of freight volume trends.
As of April 2025, U.S. economic indicators present a mixed picture. The manufacturing sector is contracting, with the ISM Manufacturing PMI falling to 48.7—marking the fifth consecutive month of decline. This is largely driven by tariffs and supply chain disruptions tied to Chinese import duties. Meanwhile, the services sector continues to expand, offering some offset.
Consumer sentiment is deteriorating. The Conference Board’s Consumer Confidence Index declined for a fourth straight month in March to 92.9—its lowest in over four years. The Expectations Index plummeted to 65.2, a 12-year low and well below the recession-warning threshold of 80. Inflation, trade uncertainty, and economic anxiety are weighing heavily, though spending has held up so far—possibly driven by anticipation of future price hikes.
The University of Michigan Consumer Sentiment Index reinforces these concerns. In April, the index dropped sharply to 50.8, nearing the all-time low set in June 2022. Inflation expectations hit a 40-year high, with consumers projecting a 6.7% price increase over the next year. Rising job insecurity adds to the malaise, with the highest share of consumers since 2009 expecting unemployment to rise. This signals mounting pressure on future consumption and broader economic stability.
CASS and DAT data continue to show weakness in the truckload (TL) market, with Van Load-to-Truck ratios and dry van spot rates in decline. However, we view these as lagging indicators with limited relevance to LTL operators.
While the LTL segment remains more insulated from Transpacific shipping disruptions, the TL market is heavily exposed to international supply chains. Many TL carriers service sectors deeply affected by tariffs, such as automotive, electronics, and industrial goods. Several public TL carriers reported disappointing Q1 results, with some shutting down operations altogether due to collapsing retail demand, weaker consumer, and plunging freight volumes from China.
By contrast, LTL carriers are predominantly domestically focused, serving intra-regional and national B2B routes with minimal direct exposure to international tariffs. LTL networks also tend to be more resilient during trade shocks due to a more diversified and service-oriented customer base. That said, a spillover effect remains likely as broader economic pressures mount.
Persistent inflation remains a key concern. Although it has eased from 2022–2023 peaks, it remains above the Fed’s 2% target. Contributing factors include increased government spending, geopolitical-driven supply chain reconfigurations, and structural energy transition investments—all of which may keep inflation elevated and complicate monetary policy decisions.
Trade volatility adds further uncertainty, restraining capital investment and slowing productivity growth. With international policy shifts and tariff risks clouding the outlook, many businesses are delaying long-term decisions—threatening innovation, hiring, and U.S. competitiveness, particularly as supply chains continue to shift away from China without clear alternatives in place.
On interest rates, while market consensus leans toward continued Fed rate cuts, there remains a risk that inflation persistence or geopolitical shocks could drive rates back up—potentially toward 7–8%. Such a scenario would elevate borrowing costs, strain households, curb corporate spending, and raise the risk of recession.
Finally, we remain attentive to potential weakening of the U.S. dollar. Erosion in global confidence, driven by trade deficits, inflation, or inconsistent fiscal discipline, could undermine the dollar’s status and further aggravate inflation through rising import costs—creating a destabilizing feedback loop for the U.S. economy. time.
