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MODE INSIGHT Transportation Market Overview

TRUCKLOAD

INTERMODAL

LTL

INTERNATIONAL

TRUCKLOAD Truckload Market Update The Outbound Tender Rejection Index (OTRI) remained compressed throughout September, holding steady in the 5-6% range. OTRI levels would need to sustain closer to 9-10% over multiple months to signal meaningful macro-level rate shifts. Current levels continue to reflect a shipper-favored market as we move into Q4 2025, with a peak season expected to be less volatile than in historically tighter Source: Sonar.Surf freight markets.

DAT’s National Van Spot Linehaul Rate Per Mile (RPM) increased 3% YoY in August. Year-over-year fuel surcharges (FSC) were slightly higher, contributing to a 4% YoY gain in all-in National RPM for dry van freight. This marks the largest YoY increase in all-in National RPM since the market downturn began in 2022. While this trend benefits carriers seeking higher rates, it does not yet indicate an imminent market shift. FTR Intelligence continues to project a stable market through the remainder of 2025 and into 2026. Projections for 2026 have been revised slightly upward in response to recent rate trends. Although a significant market “flip” is not anticipated in the near term, rising YoY diesel costs and modest linehaul rate improvements suggest the market may finally be moving off the floor of this extended freight recession.

October 2025 MODE Insight

TRUCKLOAD UPDATE

Source: ftrintel.com

National Spot Rates

$2.41

Quarter close leads to higher rates

JUL

AUG

$2.05

$2.03

$2.05

$2.08

$2.55 $2.49 $2.50 $2.53

JUL

AUG

SEP

OCT

JUL

EST.

DRY VAN Source: DAT.com/trendlines

October 2025 MODE Insight

AUG

SEP

$2.44 $2.48 OCT SEP EST.

OCT EST.

FLATBED

REEFER

INTERMODAL Intermodal Market Update Union Pacific and Norfolk Southern are launching a new Louisville service that will move both East and West between Norfolk Southern’s Louisville intermodal terminal and Union Pacific’s Los Angeles, Lathrop, Seattle, Portland, Salt Lake City and Houston intermodal terminals. This new interline service will launch on October 20 and interchange in Kansas City, which will allow the service to compete with over-the-road transit times. Canadian National and CSX have launched a new international Intermodal service from the Canadian West Coast ports into Nashville. The new service will be an interline steel wheel service which will junction in Memphis to offer lower cost, environmentally friendly service by removing drayage trucks from the roads. Southern California peak season continues with surcharges and allocations remaining in place with intermodal carriers. Traditionally, Southern California's intermodal peak season runs until approximately the Thanksgiving holiday. As of now, there are no rumors as to peak season being called off early. Spot rates out of Southern California remain high for intermodal, while peak season is still in effect. Equipment, drayage and gate capacity are easily accessible in all other areas of the country.

October 2025 MODE Insight

LTL LTL Industry News Here are links to some top stories in the industry for you to check out:

Survey Reveals Top LTL Carriers for 2025

Roadrunner Targets ‘Ride Share-like' Shipper Experience with New Pickup Platform

Morgan Stanley Cuts TL, LTL Earnings Outlook

FedEx Freight Completes Executive Team with New CFO Witt

LTL Market Update As we roll into October, the LTL market is still stuck in neutral. The “second-half rebound” everyone was hoping for hasn’t shown up yet, and most carriers are still waiting for a real cycle turn. Freight volumes have exhibited volatility, displaying strength in July, a decline in August and a moderate performance in September. This lines up with what we’re hearing from analysts who have already trimmed earnings expectations for Q3. Tariff noise and general uncertainty continue to mess with freight timing, causing pockets of activity rather than a broad pickup. The manufacturing sector still isn’t giving the industry much help. The September PMI came in below 50 yet again, marking almost three straight years of contraction. New orders slipped back into negative territory, too, so there’s not much evidence of a true recovery building just yet. Carrier updates through the quarter tell the same story: tonnage remains under pressure, and some carriers, like ArcBest, have already pulled back their margin outlooks due to soft demand and higher operating costs. Still, pricing discipline is holding strong. LTLs are sticking to their playbook, which includes protecting yield, enforcing accessorials, optimizing networks and staying picky about what freight they’ll take. Compared to the truckload side, which has a little more optimism heading into peak due to project freight and retailer activity, most LTL carriers are staying conservative. Investors will be watching Q4 commentary closely, but the message seems clear: profitability is coming from discipline, not demand. Overall, October opens with more patience than momentum. The market hasn’t turned yet, but carriers are staying sharp, managing costs tightly and waiting for volume to finally catch up.

October 2025 MODE Insight

LTL UPDATE Dynamic Pricing Gains Traction Across LTL and 3PL Networks Source: Transport Topics, “Dynamic Pricing Momentum on the Upswing in LTL, 3PL Segments,” Keiron Greenhalgh, published Oct. 8, 2025.

Dynamic Pricing, already familiar in industries like airlines, hotels, and ridesharing is gaining momentum in the lessthan-truckload (LTL) and third-party logistics (3PL) sectors. Industry leaders speaking at the CSCMP Edge 2025 conference noted that while dynamic pricing isn’t new to trucking, its adoption is accelerating as carriers and brokers look for tools to better align rates with real-time demand and shifting freight patterns. Panelists highlighted that traditional pricing strategies, such as discounts off base rates, are giving way to more granular cost-plus-margin approaches. Advocates argue that dynamic pricing allows carriers to attract loads better suited to their networks, while shippers benefit from having access to more carriers and flexible options. However, adoption requires careful consideration of shipper needs, as some may push back due to budget constraints or capacity planning challenges. Executives from Averitt Express, Pitt Ohio, SMC3, and WWEX emphasized that while dynamic pricing isn’t a onesize-fits-all solution, it represents a viable path forward particularly for carriers with transactional freight or those competing for linehaul business against parcel carriers. The use of artificial intelligence is expected to accelerate adoption, though panelists cautioned that the transition will be gradual.

October 2025 MODE Insight

LTL UPDATE United States ISM Manufacturing PMI The ISM U.S. Manufacturing PMI ticked up to 49.1 in September 2025 from 48.7 in August, narrowly beating expectations. While this marks the seventh straight month of contraction, it’s also the strongest point of the current downcycle. Production rebounded into expansion territory (51.0 vs. 47.8), but that gain was tempered by softening new orders (48.9 vs. 51.4). Employment levels continued to shrink, though at a slower pace, and both customer inventories and backlogs remained in contraction which signals continued demand weakness across industrial markets. Input costs eased slightly (61.9 vs. 63.7) but remain elevated. Many manufacturers are delaying capital spend, cutting costs and seeing slower order activity—especially in machinery, metals and semiconductor-related sectors.

Source: Trading Economics & Federal Reserve

Fuel The U.S. national average cost per gallon for on-highway diesel in September 2025 is estimated at $3.745, which is $0.037 (1.0%) higher than August’s average of $3.708. September 2024’s average was approximately $3.642, putting September 2025 at about $0.103 (2.8%) higher yearover-year. As of the first week of October 2025 (week ending October 6, 2025), the national average stands near $3.76 per gallon, reflecting a modest increase of roughly $0.015 (0.4%) from late September.

October 2025 MODE Insight

INTERNATIONAL Key Trends Volume: October demand outlook muted following soft pre-China National Day period Rates: Continued declines in import rates – and with soft demand outlook, carriers will struggle to stem further erosion Capacity: October overall capacity restored following China National Day holiday, but over utilization remains low Tarrif news: China retaliating with a plan for substantial fees on U.S. flagged ships entering China ports

Volume/Demand Final numbers from September reported U.S. imports down 8.4% from August 2025 and 8.4% below September 2024. The SONAR Inbound Ocean TEUs Volume Index for October 1 was down less than 1% from the last week of September, but off 14.58% year-on-year. Demand got a small bump from frontloading ahead of early October’s Golden Week holiday in China, but nothing substantial enough to shore up falling rates. China-origin imports decreased 12.3% month-over-month in September and 22.9% year-over-year, reversing the short-lived rebound observed in July and August, and highlighting U.S. importer’s sensitivity to volatile tariff and trade discussions.

October 2025 MODE Insight

INTERNATIONAL UPDATE Forecasts from analysts seem to point to consumer concerns over rising prices, tariff concerns and trade shifts creating a muted volume outlook through the end of the year. A recently revised forecast by the National Retail Federation shows import volumes falling 3.4% to close out the year. This translates into the remaining four months of 2025 being down 15.7% compared to the same four months in 2024. On a year-to-date basis, volumes through September are still tracking 1.9% ahead of the same period in 2024, emphasizing the likely impact of frontloading volumes in early 2025 but also a relatively resilient overall demand despite trade war policies, tariffs and national economic uncertainty. Industry analysts say that a YoY decline in total import volumes is a rarity in container shipping. The only real exceptions were the decreases seen during the 2009 financial crisis and the COVID pandemic, which were shortlived, notable events. Imports have reliably grown at a rate of two, three or more times that of the GDP.

Rates Container rates on the eastbound trans-Pacific continued their decline as ocean carriers increase blank sailings amid weak demand that’s expected to continue through the end of this year. Asia-U.S. West Coast rates fell 15% to $1,853 per FEU in the first week of October, according to the Freightos Baltic Index, while Asia-U.S. East Coast prices increased 16% to $3,967 per FEU. The last time West Coast prices were this low was around December 2023, when spot rates dipped to approximately $1,744 per FEU. Current spot rates in place now are valid through October 14, and it is unlikely there will be any increases on October 15. FAK rates should remain stable until China returns fully from the week-long China holiday; however, with no real volume recovery forecasted through October, rates will remain under pressure.

October 2025 MODE Insight

INTERNATIONAL UPDATE Capacity/Supply In preparation for the China national holiday, the late September surge in blank sailings continued into early October and enforced the carriers’ plans to make a concentrated effort to stabilize continued rate erosion after the break. As the post-holiday capacity is restored and volume forecasts remain soft, rates will remain under increasing pressure. Volume and booking allocations for the second half of October are open on almost all routes, with the small exception of feeder routes from Southeast Asia, where there was no holiday break in production and shipping activity. Source: M+R Spedag Group

The carriers removed a substantial amount of capacity heading into the October holiday period in China, but by the end of October, there should be a return of all but four sailings to the trade. With this influx of capacity, there are concerns that rates will again come under pressure as they were prior to the holiday break in China. With fewer blank sailings in the coming weeks, load factors will be further stressed. This may prompt more blank sailings later in October and into November, but it will not prevent rates from dropping further in the meantime. Port congestion became an issue in Asia as a series of strong typhoons disrupted shipping lanes in East Asia during late September/early October. Congestion is worsening in main ports including Shanghai, Ningbo and Qingdao, while departure delays and missed feeder connections are increasing. It is also expected that carriers will begin to make decisions on seasonal service deployment, which may result in more services being suspended due to weak year-end demand. Already in late September, Gemini Cooperation partners Maersk and Hapag-Lloyd have announced the suspension of their joint TP9/WC6 service covering Xiamen, Busan and Long Beach, with the last sailing having departed Xiamen on September 22.

October 2025 MODE Insight

INTERNATIONAL UPDATE Tariff News China is now firing back in the U.S. trade war with retaliatory fees on U.S. ships calling ports in China. These fees announced by China’s Ministry of Transportation go into effect October 14 and mirror the levels set by the U.S. Trade Representative (USTR), which are also scheduled to go into effect on that same date. The Trump administration in April announced the fees under Section 301 of the Trade Act of 1974 that grants the USTR the authority to investigate and respond to unfair foreign trade practices that harm U.S. commerce. They follow the results of a USTR probe begun during the Biden administration that found China leveraged subsidies, central controls and other unfair practices to build a dominant position in global shipping and shipbuilding. China’s fees apply to U.S.-flag and U.S.-built vessels, as well as ships owned or operated by U.S. entities, if more than 25% of the ownership, voting rights or board seats of the entity are based in the U.S. At this point, the fees would hit U.S.-flag lines Matson, Maersk Line Limited, a subsidiary of Denmark’s A.P. Moller-Maersk, and APL, a unit of CMA CGM of France. All of these carriers deploy U.S.-flag/U.S.-built vessels for use in specific trade lanes or for specific service offerings. The fees start at $56 per net ton at current exchange rates compared to the $50 USTR fee and escalate to $90 ($80 USTR) as of April 17, 2026; $123 ($110) as of April 17, 2027, and $157 ($140) from April 17, 2028. The overall impact with these U.S. carriers remains unknown, but passing on the additional costs to shippers is a possibility.

October 2025 MODE Insight