
With a lot of the economy looking flat, at best, for the forseeable future, FTR Transportation Intelligence doesn’t see a lot to get excited about. But there are some developments heading into peak shipping season, analysts said in a webinar Thursday.
Retail inventories, CEO Jonathan Starks says, are fairly lean, but not quite as low as in the pandemic days. If there’s any uptick in demand, he adds, there will be a need to pull inventory into the system.
That may represent an opportunity amid flat manufacturing output. What growth there has been, Starks says, has been in sectors that don’t drive a lot of transportation needs, he says, such as computer and electronic products, pharmaceuticals and medicine.
“What is really driving spending and growth right now, specifically on durable goods, is being driven by computer and software activity,” Starks says.
While retail spending is ticking upwards, there’s not a lot of broad growth to get excited about. The market remains highly segmented and aggregated toward the top tiers of earners.
“That’s not a broad view of robust spending activity,” Starks says.
Tariffs loom large over any economic forecast, and FTR’s webinar delivered more of the same news: collections are up and will continue to increase.
“We’re assuming the effective tariff rate will normalize somewhere in the mid-teens by the time we get into 2026,” Starks says.
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Also putting pressure on imports are new vessel fees which will start next week. An arriving ship owned or operated by a Chinese entity will face $50 per net ton fees. Any Chinese-built vessel, regardless of ownership, will see fees either $18 per net ton or $120 for each container discharged, whichever is higher. Vessels classified as a vehicle carrier or roll-on/roll-off will also see $14 per net ton fees.
“These can add up very quickly when you’re talking about the significant size [of these maritime vessels],” Starks says.
Vice President of Trucking Avery Vise says rates are holding steady going into peak season and FTR predicts a modest recovery next year.
“There’s no real great, robust environment on the horizon,” Vise says.
Freight rates rolling along the bottom is starting to tell in trucking employment, too. With the government shutdown, there’s no new Bureau of Labor Statistics data, but there was a preliminary revision last month with a 2% drop in trucking payroll employment with a more than 5% drop in long-distance specialized.
For-hire carrier operations have stabilized, Vise says, but rising costs and other pressures could change that soon.
“This is going to get kind of volatile, potentially,” he warns, as insurance costs and new regulations on foreign drivers start to exert pressure, especially on smaller carriers. Carriers of any size, Vise says, have done about as much as they can to right-size their fleets. The overhang is from the very small carrier environment, which can be harder to pin down in the data. And those carriers are more like to be affected by foreign driver regulations.
Vise showed a new rule to scrap non-domiciled CDLs, combined with regulations on English proficiency, may mean as many as 194,000 drivers exiting the market. The later regulation has gotten more attention since a fatal crash in Florida brough the issue to the forefront, both in terms of headlines and enforcement of English language violations.
Lastly, Vise says trucking insurance premium costs will continue to be a headwind in the market, especially as more renewals roll out with higher rates. This increases the likelihood of failures, in the very small carrier space, he says, but given the other factors many of these businesses are facing, it can be difficult to see the effect.