The freight market could soon experience an increased seasonal lull, the OOIDA Foundation said in its July market update.

A typical summer slowdown is expected to be “more pronounced,” according to the Total Spot Market Cycle Indicator.

TSMCI cited contractions in dry van and reefer and quoted a manufacturer who said tariffs have “utterly stopped” global and domestic sales.

The Foundation update revealed an overall downward trend in demand as well as rates. Additionally, capacity has loosened while operating costs have remained steady.

Van market

Demand increased in all regions. Spot rates increased as usual for this time of year but were lower than in to 2024.

The dry van composite index decreased after seasonal adjustments. A drop in food manufacturing, plastics and rubber manufacturing and grocery and related products wholesaling were responsible for this decline.

Flatbed market

All but one region reported higher demand as well as a lower rates.

Primary metals (perhaps due to front loading) and farm machinery and equipment were the primary drivers of an increase in the flatbed composite index. This rise ended two consecutive months of decline.

Reefer market

The Southeast and Northeast regions had the most favorable ratios for carriers. However, more than half of the regions reported a decrease in demand.

A majority of regions also saw a decrease in rates.

Declining food manufacturing and grocery and related product wholesaling drove the drop in the composite index after seasonal adjustments.

Trucking market

The effects of the highest tariffs since the 1930s are very uncertain, according to the Cass Shipment Index.

“Forward-looking visibility remains highly dependent on policy development and legal challenges,” Cass said. “The uncertainty has lowered the economic outlook, and pre-tariff inventory building will lead to destocking regardless of the outcome of trade negotiations in the coming months.”

For-hire carriers appeared ready to expand but reversed course in April.

Transportation utilization held steady overall, according to the Logistics Managers’ Index.

Fuel prices were higher for the first time in two months.

“We’ll continue to monitor events in the Middle East for any potential impacts on cost,” the Foundation said.

Rising used truck prices could be problematic.

“It’s not just a challenge for the operator; it’s a challenge for the dealers, too, because they’re holding the inventory to sell,” said Kirk Mann, executive vice president and head of transportation at Mitsubishi HC Capital America.

Freight market

Manufacturing activity has increased for two consecutive months. That increase may be temporary, as importers and exporters hurry to get ahead of tariffs.

Both inventory and imports remained in contraction territory in June.

Housing starts expanded, but the rising costs of construction goods and inflation are putting a damper on the housing market.

Inventory levels unsurprisingly remained flat in May. This was mostly due to a delay in reporting, as wholesalers had pulled orders forward to get ahead of the tariffs.

C.H. Robison said some shippers had cancelled or dramatically cut back on plans to import, primarily due to inventory.

“We are likely to see a muted but more normal peak season out of the West Coast starting in late August,” C.H. Robinson said.

The full Foundation freight market update is available online. LL