Freight Market Outlook: Why “Neutral” Doesn’t Mean “Normal” for Shippers

FTR’s latest Shippers Conditions Index (SCI) for February landed just below neutral at -0.3, a modest shift from January’s slightly positive 0.6 reading. But despite the calm surface, significant undercurrents are building—driven in part by evolving trade policy and shifting freight activity.

What’s Driving the Change?

• Import Surge Peaks: Freight volumes saw a temporary boost as shippers moved quickly to import goods ahead of new tariffs. This short-lived surge tightened capacity but is now tapering off.
• Fuel and Rates Offsetting Each Other: Lower fuel costs offered a modest benefit, but weaker freight rates and tighter capacity canceled out much of the upside.
• Second Half Outlook Improves Slightly: FTR has updated its forecasts to reflect the full economic impact of the tariff environment. While challenges remain, market conditions in the back half of 2025 are shaping up to be slightly more favorable than previously projected.

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Tariffs Are the Wild Card

Trade tensions have intensified. Recent actions include:

• A 10% additional duty on Chinese goods now in effect—with no pause.
• China’s swift retaliation via tariffs on key U.S. exports like LNG, coal, and farm equipment.
• New export restrictions on critical rare earth minerals (e.g., tungsten, bismuth), which could ripple through multiple industries.

The combination of these measures is reshaping freight flows and introducing new volatility. China alone accounts for nearly 30% of U.S. containerized imports and 40% of U.S. rare earth mineral imports. Disruptions here will be felt across shipping lanes and supply chains.

“We expect a much weaker freight environment by early summer,” says Avery Vise, FTR’s VP of Trucking. “Shippers’ own volumes will likely soften, but market conditions may prove less painful than initially expected thanks to adjusted forecasts and tariff-related impacts.”

Strategic Takeaway

Shippers should not be lulled into complacency by a near-zero SCI score. Instead, this is a signal to re-evaluate contracts, anticipate freight volume softening, and track geopolitical developments closely. The back half of the year might hold opportunity—but only for those ready to act on it.

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