October 2025 LTL Demand Metrics: A Deep Dive

The SMC3 Monthly LTL Executive Briefing for October 2025 paints a complex picture of the less-than-truckload (LTL) freight market—one characterized by persistent demand softness, elevated pricing, and cautious optimism for 2026. Despite encouraging macro signals—such as a Q3 GDP estimate of +3.9% (Atlanta Fed) and a Flash Manufacturing PMI of 52.2—LTL volumes remain decoupled from economic growth, dragged down by services-heavy consumer spending, inflation-distorted unit sales, and inventory conservatism.

At Gain Consulting, we go beyond the headlines to deliver actionable intelligence for shippers, carriers, and 3PLs. This extended analysis unpacks sector-by-sector demand forecasts, regional and global PMI trends, pricing dynamics, macroeconomic headwinds and tailwinds, and five high-impact strategies to optimize LTL performance through Q1 2026 and beyond.

Executive Summary: Key Takeaways

Metric	Status	Implication for LTL
LTL PPI	+10.5% YoY (Aug)	Pricing power intact despite volume weakness
Manufacturing (IPMAN)	+2.2% 2025 forecast	Stable but not robust; tariff stockpiling supports
E-Commerce Sales	+10.1% YoY (Aug)	Strong dollar growth, but unit volume lags
Retail Demand	Q4 softening	Consumer caution across income tiers
Construction (Non-Res)	-0.3% 2025	Q2 2026 rebound expected
GDP vs. Freight	+3.9% GDP, flat freight	70% of consumer spend on services
Diesel Forecast	$3.40/gal in 2026 (-7%)	FSC relief incoming

Sector-by-Sector Demand Deep Dive

1. Manufacturing: Moderate Growth with Upside Potential

• 2025 Forecast: +2.2% (unchanged MoM, up from -0.2% in 2024)

• 2026 Forecast: +2.0% — in line with historical average

• Flash PMI: 52.2 (Oct), up from 52.0 — sharpest new order influx in 18 months  

• Driver: Domestic demand + tariff-driven inventory buildup (5 of last 6 months)

• LTL Correlation: IPMAN has 99.7% 6-month forecast accuracy with daily LTL shipment counts

• Gain Insight: Manufacturers are pre-positioning inventory ahead of potential 2026 tariff hikes, creating short-term LTL lift in Q4–Q1.

2. Retail: Resilience in Dollars, Weakness in Units

• Outlook: Q4 softening, momentum regain in 2026

• Consumer Sentiment: 53.6 (Oct) — just 3.6 points above all-time low  

• Unit vs. Dollar Gap:

  • General merchandise: +1.9% sales → -1% units  

  • CPG: 4-point gap → -1 to -2% units

• LTL Impact: Retail = ~40% of LTL revenue for many carriers

• Gain Insight: Inflation masking volume decline — freight moves units, not revenue. Expect Q4 accessorial pressure from peak surcharges.

3. Nonresidential Construction: Contraction Before Rebound

• 2025 Forecast: -0.3% (inverted vs. prior outlook)

• 2026 Driver: Q2 project starts — model anticipates statistical uptick

• $5 Trillion in “Promises”: Announcements from firms/countries, but execution risk high  

• LTL Relevance: Largest competitor for CDL drivers  

• Gain Insight: Capacity tightening in H2 2026 as construction ramps — secure drivers now.

4. Residential Construction: Affordability Headwinds Persist

• Outlook: Sluggish into Q1 2026  

• Mortgage Rates: Tied to 10Y Treasury (~4%) → 30-year avg. ~6%  

• Pending Home Sales: -0.9% YoY (Sep) — 2nd strongest pace of year

• Existing Home Sales: +1.5% MoM — 7-month high

• LTL Impact: One home = up to 7 truckloads; sector = >16% of GDP  

• Gain Insight: Fed rate cuts (50 bps done) not yet enough — need another 25–50 bps for real momentum.

5. Automotive: Flat Now, Uptick Later

• Outlook: Flat → Q1 decline, H2 2026 uptick

• Aug Sales: +6.0% YoY to 16.4M SAAR (down from 17.8M peak)

• Fed Impact: 50 bps cut helps, but December cut now in question  

• LTL Relevance: 11M jobs, feeds OEM → Tier 1/2/3 supply chain  

• Gain Insight: Auto loan rates key — monitor Fed commentary post-election.

6. Computers & Electronics: Bright Spot

• 2025 Forecast: +6.4% (from 5.2% in 2024)

• Accuracy: 98.2% (6-month)

• Trend: Above long-term trendline into 2026

• LTL Impact: Drives expedited, high-value, tech-enabled shipments  

• Gain Insight: Prioritize lanes with tech distributors, semiconductors, AI hardware.

7. E-Commerce: Record Dollars, Questionable Units

• Aug Sales: +10.1% YoY (seasonally adjusted) — all-time high  

• Inflation-Adjusted: ~6.9%  

• Driver: Back-to-school shift online  

• LTL Relevance: Parcel → LTL consolidation opportunity

• Gain Insight: Zone-skipping and pool distribution critical for cost control.

Pricing Dynamics: Stability Amid Volume Weakness

Index	Aug M/M	Aug YoY	Context
LTL PPI	+0.4%	+10.5%	Highest in 5 months; Q3 SEC filings show volume -6 to -9% YoY
Parcel PPI	Unchanged	+8.7%	3rd-highest YoY since 2021/22 crisis
TL PPI	+1.8%	-0.2%	DAT spot: -1.0% YoY, Load-to-Truck ratio 6.03 (vs. 4.13 in 2024)

Carrier Discipline: No capacity additions — truck driver jobs flat MoM, +slightly YoY.

Macroeconomic Context: The GDP-Freight Disconnect

Factor	Data	LTL Implication
Q3 GDP	+3.9% (Atlanta Fed)	Should drive freight — but doesn’t
Consumer Spending	70% of GDP	70% services (vs. 65% historic) → less goods movement
Inflation vs. Units	3–4 pt gap	Dollar sales up, units down
Inventory Sentiment	ISM: “Too high”	No restocking urgency
Job Cuts	172K announced in Oct	Middle/upper income fear → spending pullback

Global & Regional PMI: Mixed Signals

Region/Country	Mfg PMI	Services PMI	Trade w/ US	Trend
US	52.2	54.2	—	↑ Domestic strength
China	—	52.9	$655B	↑ Potential deal impact
Canada	46.3	—	$665B	↓ Weak cross-border
Mexico	—	—	$661B	↓ Labor/affordability
Eurozone	51.3	—	$632B	↑ Modest recovery
Global	50.0	—	$4.7T	Contraction

China Trade Talks: Late-Oct handshake on fentanyl tariffs (20%→10%), ag/oil purchases, rare earths. 47% total tariff still high — limited pre-buy incentive.

Fuel & Cost Outlook

Metric	Current	2026 Forecast	Change
Diesel	$3.69/gal	$3.40/gal	-7%
WTI Oil	—	$48/bbl Q1	Bearish inventory
FSC Impact	—	2–4% savings	Audit clauses now

Gain Consulting’s 5-Point LTL Optimization Framework

1. Lane Portfolio Rebalancing

• Action: Increase exposure to electronics (+6.4%), e-commerce consolidation, tariff-stockpiled manufacturing  

• ROI: +8–12% margin, +11% OTP

2. Contract Rate Lock-In

• Action: Secure 6–12 month contracts at current LTL PPI (+10.5% YoY)

• ROI: 3–5% savings vs. 2026 spot risk

3. Capacity Pre-Commitment

• Action: Book Q2 2026 space before non-res construction rebound

• ROI: Avoid +15% spot spikes

4. Fuel Surcharge Optimization

• Action: Model $0.29/gal drop; audit FSC vs. EIA forecast

• ROI: 2–4% recovery

5. Tariff & Inventory Intelligence

• Action: Use zone-skipping, West Coast DCs, pool distribution  

• ROI: 5–7% landed cost reduction

Client Case Study: A national CPG shipper reallocated 28% of volume to high-growth electronics LTL lanes, reducing accessorial fees by 18% and improving dock-to-stock by 2.1 days.

2026 Outlook: Cautious Optimism with Clear Risks

Scenario	Probability	LTL Impact
Base Case	65%	+2.0% volume, +8% pricing
Tariff Deal Hold	50%	+1–2% manufacturing lift Q1
Fed Cuts Resume	40%	Auto + housing momentum H2
Labor Sentiment Crash	25%	-3–5% retail volume

Watch List:

• November Flash PMI (tariff pre-buy fade?)

• December Fed Decision

• Q4 Carrier Earnings (volume guidance)

• China Trade Follow-Through

Final Word: Act Now, Win Later

The LTL market is in a holding pattern—volumes soft, pricing firm, capacity tight. The 2026 rebound is coming, but only for those who prepare.

Gain Consulting offers:

• Custom LTL Demand Forecasting

• Carrier Contract Benchmarking

• Tariff Impact Modeling

• Fuel Surcharge Audits

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Source: SMC3 Monthly LTL Executive Briefing – October 2025 (Powered by Armada Corporate Intelligence)