Freight environment signals hope, but policy shifts bring risks
Summary
Miller noted this could be due to happen if a major trade war and mass deportations worsen inflation, driving the Federal Reserve to raise interest rates by September. However, DAT principal analyst Dean Croke noted that as the transportation industry rushed to bring extra imports at the end of 2024, there could be a bigger seasonal slowdown in the first quarter. “The magnitude of increase will depend on the reliance on imports as well as the extent of wholesaler and retailer trade margins, assuming full tariffs pass through onto buyers,” Miller said. Craig Decker, managing director at Brown Gibbons Lang & Company, pointed out that if tax cuts expire and people have less disposable income, they will likely spend less, bringing lower demand for transportation across the supply chain. “If these factors were to be combined with lower levels of freight demand, this would result in the continuation of a sub-par rate environment, leading to an increased number of failures and sales of weaker carriers.”