Shippers called the first half better than carriers

Echo surveyed 5,000 carriers and shippers on the freight market

On Tuesday, Echo and FreightWaves co-hosted a webinar that featured Sean Burke, Echo chief commercial officer, and Jay Gustafson, Echo executive vice president of brokerage operations. The presentation discussed the results of a survey conducted at the end of last year, with more than 5,000 carriers and shippers participating, split about equally, on their expectations for 2025. While much has changed the past five months, the survey results are still very relevant, especially with the context provided by the webinar participants. 

• Going into the year, shippers expected flattish pricing despite anticipated volume growth. Most shippers were not budgeting for major freight rate increases, and those that did expected rate increases to be modest. Only 9% of shippers surveyed expected rates to rise more than 5% while 30% of shippers expected rates to rise in the 1%-5% range. Meanwhile, 36% of shippers expected rates to remain the same and 25% expected a rate decrease.
• But, when asked about volume, shippers expected to move more than they did the prior year. Thirty percent of shippers surveyed expected their volumes to increase more than 5% while another 37% expected their volumes to increase in the 1%-5% range. At first blush, those volume expectations seem to be at odds with shippers’ pricing expectations since pricing and volume typically move in the same direction. The Echo executives interpreted that to mean that shippers were confident enough that there was sufficient capacity that even a meaningful increase in volume would not be enough to make freight rates very inflationary. 
• Carriers expected rates to rise, while also expecting pricing to primarily be a function of demand. Eighty percent of carriers surveyed expect either economic conditions and/or demand fluctuations to be the most influential factor impacting truckload pricing this year. Only 20% expect a supply-side issue, such as driver availability, to be the biggest factor driving pricing this year. Forty-five percent of carriers expected contract rates to increase by more than 5% while 51% expected spot rates to rise by more than 5%. 

Carriers said access to well-paying freight is their biggest challenge. Since the survey was taken, freight volume surprised to the downside – the SONAR tender volume index is down 12% year over year. Tender volume for 2023, 2024 and 2025 are shown in pink, green and white, respectively. (Chart: SONAR)

• Carriers and shippers came into the year at odds on pricing. Surveys often contain wishful thinking, which may be true in this case as well. Only 9% of shippers expected freight rates to rise more than 5% this year. That compares to 45% of carriers who expected contract rates to increase by more than 5% and 51% of carriers who expected spot rates to rise by more than 5%. No distinction was made in the shippers’ survey between spot and contract rates. 

The latest SONAR data points, on the 1-year year-over-year change chart above, show dry van contract and spot rates down 2% (VCRPM1.USA) and up 2% (NTIL.USA), respectively, showing the year has unfolded closer to shippers’ expectations. Of course, the market conditions could improve for carriers in the second half. (Chart: SONAR)

• Carriers seemed relatively unconcerned with driver availability issues. If the survey were rerun today, carriers might express more concern over driver availability in light of the Trump administration’s new guidance to enforce stricter labor, CDL and English language requirements. In the survey, only 9% of carriers believed that driver availability would be the biggest factor impacting truckload pricing this year. On a separate question, only 7% of carriers rank “ability to hire drivers” as their biggest challenge while “driver pay” was listed as the biggest issue for only 6% of carriers. Reflecting lackluster freight demand, 51% of carriers surveyed by Echo say “access to well-paying freight” is the biggest challenge impacting their business.    

• Supply chain volatility supports freight rates. According to the Echo executives, the lumpiness in demand we have seen as a result of tariffs and the likelihood of supply chain disruptions should lead to freight rate inflation. That makes sense to me because, more often, capacity/equipment will not be in the location where shippers need it. 

Logistics Managers’ Index data shows rising inventory levels and inventory costs from last year, which reflects tariff avoidance and the anticipation of supply chain disruption. (Chart: SONAR)

• Are carriers and shippers taking freight fraud seriously? The response to the question regarding digital tools surprised me. Just over half – 50.6% – of shippers who responded said they were not interested and not planning to implement carrier verification tools. The Echo executives attributed that to shippers’ reliance on 3PLs rather than a lack of awareness.

The Stockout show

(Image: FWTV)

On Monday’s The Stockout show, I discussed a recent article on cybersecurity before spending most of the time discussing the freight market. In short, the freight market is showing signs in the direction of tightening, potentially setting up a bullish second half for carriers. 
The show is available via The Stockout YouTube channel.

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