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GAIN CONSULTING

Riding the Roller-Coaster: Navigating Tariffs and Market Uncertainty in the 2025 LTL Market

  • Kelsea Ansfield
  • Jul 2
  • 7 min read

At Gain Consulting, we empower U.S. shippers to tackle the complexities of the ever-evolving logistics landscape with strategic, data-driven solutions. The 36th Annual State of Logistics Report, published by Logistics Management on July 1, 2025, paints a challenging picture for the $66 billion less-than-truckload (LTL) market. Authored by John D. Schulz and produced by the Council of Supply Chain Management Professionals (CSCMP) with Kearney and Penske Logistics, the report highlights how tariffs, economic uncertainty, and shifting demand are creating a turbulent year for LTL carriers. As Satish Jindel of SJ Consulting aptly notes, “It’s going to be a roller-coaster, and that’s because our economy is on a roller coaster due to the tariffs” (Logistics Management, July 1, 2025). In this fact-based blog post, we analyze the LTL market’s challenges, their implications for U.S. shippers, and actionable strategies to navigate this volatile landscape.


The LTL Market in 2025: Key Challenges

The 36th Annual State of Logistics Report underscores a turbulent environment for the LTL sector, driven by several critical factors:

  • Economic Uncertainty: The U.S. economy faces persistent uncertainty due to fluctuating demand and geopolitical tensions. The report notes that U.S. business logistics costs reached $2.6 trillion, or 8.7% of GDP, reflecting flat volumes and rising operational costs (Logistics Management, July 1, 2025).

  • Tariff Pressures: Proposed 25% tariffs on imports from Canada and Mexico (effective February 1, 2025) and 10% tariffs on Chinese goods, alongside a 54% tariff on low-value e-commerce shipments after the de minimis exemption ended on May 2, 2025, are disrupting supply chains (Logistics Management, January 30, 2025; BCG, June 30, 2025). These tariffs increase costs for raw materials like steel and aluminum, impacting industries such as automotive and manufacturing (FleetOwner, April 7, 2025).

  • LTL Profitability Challenges: The $66 billion LTL market faces declining shipment volumes (e.g., 6.8% drop for Old Dominion, 5% for XPO, 0.4% for Saia, CCJ, June 18, 2025) and rising operational costs, squeezing carrier margins despite a 5.4% LTL PPI increase (Trucking Dive, June 16, 2025). Overcapacity from new terminals acquired post-Yellow bankruptcy further pressures profitability (Logistics Management, July 3, 2024).

  • Freight Recession: Weak demand, reflected in a -4.0 Philadelphia Fed Factory Index (Economy in Brief, June 23, 2025) and an 8.5% transborder freight decline in April 2025 (BTS, June 2025), compounds challenges for LTL carriers (Logistics Management, July 1, 2025).

  • E-Commerce Growth: 15% cross-border e-commerce growth in 2024 (U.S. Census Bureau) and global online retail sales nearing $6.3 trillion drive demand for faster, cost-efficient deliveries, with 68% of consumers expecting transparency (FedEx 2025 E-Commerce Trends Report). This pressures LTL carriers to optimize last-mile operations (Logistics Management, July 1, 2025).

Key Takeaway: The LTL market faces a turbulent 2025 due to tariffs, economic uncertainty, declining volumes, overcapacity, and e-commerce-driven demands, threatening carrier profitability.


Contextual Factors Shaping the LTL Landscape

The LTL sector’s challenges are amplified by broader economic and industry trends:

  1. Tariff-Driven Disruptions: Tariffs on Canada and Mexico, the U.S.’s largest trading partners with $840 billion in 2024 trade (Logistics Management, June 3, 2025), threaten sectors like automotive and manufacturing, which rely heavily on cross-border LTL freight (FleetOwner, April 7, 2025). The end of the de minimis exemption has shifted e-commerce shipments to bulk ocean cargo, reducing air freight demand and increasing LTL reliance for domestic legs (BCG, June 30, 2025).

  2. Overcapacity and Carrier Attrition: The LTL market struggles with excess capacity from terminals acquired after Yellow’s 2023 bankruptcy, with carriers like Saia, Estes, and XPO adding capacity in a weak economy (Logistics Management, July 3, 2024). Meanwhile, carrier attrition due to low spot rates (down 36% since 2022, Supply Chain Dive, January 14, 2025) risks future capacity shortages (Logistics Management, July 1, 2025).

  3. Rising Costs: A 5.4% LTL PPI increase and higher raw material costs (e.g., steel and aluminum) due to tariffs increase carrier expenses, with limited ability to pass costs to shippers amid weak demand (Trucking Dive, June 16, 2025; FleetOwner, April 7, 2025).

  4. Technology Imperative: The report emphasizes the need for AI, automation, and integrated systems to enhance agility. Carriers like Saia (6.2% tonnage increase in Q1 2025) are investing in technology, but smaller carriers struggle with automation costs (Logistics Management, July 3, 2024; Logistics Management, July 1, 2025).

  5. Consumer Expectations: E-commerce growth drives demand for faster deliveries, with 76% of shoppers expecting real-time updates (FedEx). LTL carriers must balance cost efficiency with service quality (Logistics Management, June 3, 2025).

Key Takeaway: Tariffs, overcapacity, rising costs, technology demands, and consumer expectations create a complex environment for LTL carriers, challenging profitability and service reliability.


Implications for U.S. Shippers

The LTL market’s turbulence has significant implications for U.S. shippers:

  1. Rising Freight Costs: Declining volumes and a 5.4% LTL PPI increase raise per-shipment costs, squeezing shipper margins (Trucking Dive, June 16, 2025). Tariffs may further increase costs for goods like auto parts (FleetOwner, April 7, 2025).

  2. Capacity Risks: Overcapacity keeps rates low (contract rates up slightly, spot rates down 36% since 2022), but carrier attrition could lead to shortages by Q4 2025, especially at ports like Laredo ($23.9 billion) and Detroit ($7.2 billion) (Supply Chain Dive, January 14, 2025; BTS, June 2025).

  3. Supply Chain Disruptions: Tariff-driven import surges (e.g., 138,519 TEUs in Los Angeles, Journal of Commerce, June 24, 2025) and retaliatory tariffs from Canada and Mexico could disrupt LTL flows, risking delays (Logistics Management, January 30, 2025).

  4. Inventory Challenges: High inventory levels and tariff-driven buffers increase risks of overstocking or stockouts, disrupting just-in-time strategies (Supply Chain Management Review, June 2025).

  5. Customer Expectations: Delays at congested ports or due to capacity constraints may impact 68% of shoppers expecting transparency, particularly for e-commerce (FedEx).

Key Takeaway: Shippers face rising costs, potential capacity shortages, supply chain disruptions, inventory risks, and pressure to meet consumer expectations in a volatile LTL market.


Strategic Recommendations for U.S. Shippers

To navigate the LTL market’s challenges in 2025, Gain Consulting recommends the following strategies:

  1. Lock in Favorable Rates:

    • Conduct LTL sourcing events now to secure rates with carriers like Old Dominion, XPO, or Saia, leveraging current overcapacity (Logistics Management, August 4, 2024).

    • Use Gain Consulting’s rate benchmarking tools to target 2-3% increases (Uber Freight Q2 Outlook, May 2025).

  2. Strengthen Carrier Relationships:

    • Build partnerships with regional carriers like Estes for reliable capacity at key ports (BTS, June 2025).

    • Negotiate volume discounts to offset tariff-driven cost increases (Logistics Management, July 1, 2025).

  3. Optimize Freight Operations:

    • Consolidate shipments at high-volume ports like Laredo and Detroit to maximize density and reduce costs under the new NMFC system (DC Velocity, June 19, 2025).

    • Optimize shipment planning to minimize accessorial fees for high-value goods like auto parts (BTS).

  4. Leverage Technology:

    • Adopt AI-driven classification tools to streamline LTL tenders and ensure NMFC compliance (DC Velocity, June 19, 2025).

    • Implement transportation management systems to optimize routing and manage costs, enhancing efficiency (Logistics Management, July 1, 2025).

  5. Enhance Inventory Management:

    • Use AI-driven forecasting to balance stocks, mitigating tariff-driven disruptions (24/7 Staff, June 2025).

    • Implement pool distribution near key ports to streamline inventory flow (Supply Chain Management Review).

  6. Monitor Tariff and Market Trends:

    • Track tariff updates (Journal of Commerce, June 24, 2025) for February 1, July 9, and August 14 deadlines to leverage USMCA benefits (BTS).

    • Stay informed via CCJ and ASCM webinars for LTL and tariff insights (Logistics Management, June 3, 2025).

  7. Improve Customer Communication:

    • Provide transparent delivery updates to meet 68% of shoppers’ transparency expectations, using Gain Consulting’s branded tracking solutions (FedEx).

    • Notify customers of potential delays due to tariffs or port congestion (Journal of Commerce).

  8. Prepare for Peak Season:

    • Secure capacity early for Q4 2025, as import declines (8.1-21.8%, Global Port Tracker, June 2025) and tariffs may tighten networks (DAT One).

    • Use Gain Consulting’s expertise to negotiate contracts and mitigate disruptions (Logistics Management, July 1, 2025).

Key Takeaway: Shippers can navigate LTL challenges by locking in rates, strengthening carrier ties, optimizing operations, leveraging technology, managing inventory, monitoring trends, communicating effectively, and preparing for peak seasons.


How Gain Consulting Can Support Your Success

Gain Consulting is your trusted partner in navigating the turbulent $66 billion LTL market in 2025. Our tailored solutions include:

  • Rate Negotiation: Secure competitive rates with carriers using advanced benchmarking tools.

  • Freight Optimization: Consolidate shipments and secure capacity at ports

  • Inventory Management: Deploy AI forecasting and pool distribution to balance stock and costs.

  • Technology Integration: Implement transportation management systems and dimensioning tools for NMFC compliance and efficiency.

  • Customer Experience: Offer branded tracking and transparent communication to maintain trust.

  • Market Insights: Provide real-time tariff and LTL trend analysis for strategic planning.


The 36th Annual State of Logistics Report warns of a “roller-coaster” year for the LTL market, driven by tariffs and economic uncertainty. Partner with Gain Consulting to build a resilient, cost-effective supply chain that thrives in 2025’s volatile landscape.


Contact Gain Consulting today to future-proof your logistics strategy.


Sources: Logistics Management, “36th Annual State of Logistics: Tariffs and Market Uncertainty Challenge LTL Carriers’ Profitability,” July 1, 2025; Logistics Management, “CSCMP State of Logistics Report,” June 3, 2025; Logistics Management, “2025 Truckload Roundtable,” July 1, 2025; CCJ, “Old Dominion, XPO, and Saia See Shipment Declines,” June 18, 2025; Trucking Dive, “LTL PPI Increase,” June 16, 2025; DC Velocity, “New NMFC System,” June 19, 2025; Journal of Commerce, “Tariff-Driven Import Surge,” June 24, 2025; Economy in Brief, “Philadelphia Fed Factory Index,” June 23, 2025; Bureau of Transportation Statistics, “Transborder Freight,” June 2025; FedEx 2025 E-Commerce Trends Report, February 18, 2025; U.S. Census Bureau, E-Commerce Statistics, 2024; Supply Chain Management Review, Inventory Trends, June 2025; DAT One, Freight Market Trends, June 2025; Uber Freight Q2 Outlook, May 2025; Logistics Management, “Quest for Quality 2024: Truckload,” August 4, 2024; Supply Chain Dive, “2025’s Logistics Risks Include Tariffs, Labor Strife,” January 14, 2025; FleetOwner, “Supply Chain Expert Analyzes Impact of Tariffs,” April 7, 2025; BCG, “How Logistics Companies Can Navigate Tariffs,” June 30, 2025.

 
 
 

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