As we close out 2025, the freight market remains uncertain. The average effective tariff rate rose to 17%, the highest since 1936, and the manufacturing sector is continuing to contract as manufacturers face inflation. Capacity is also slowly tightening, with new tractor and trailer orders down 16% YoY. To stay ahead and prepare for 2026, logistics teams need to be proactive, data-driven, and plan for multiple market scenarios.
Our latest Quarterly Market Update and Outlook Report provides valuable insights to help shippers, carriers, and logistics professionals make informed decisions. This quarter (Q4 2025), we'll examine the latest trends in U.S. truckload, LTL, and cross-border freight, as well as what to expect in 2026.
U.S. trucking: Navigating a shifting landscape
For manufacturers, tariffs affect the prices of commodities such as metals, minerals, and machinery. As a result, the manufacturing sectors are experiencing inflation. These factors, alongside a slowing job market, create headwinds for truckload demand.
Compared to previous years, the peak tractor order season has been significantly weaker, signaling continued supply contraction into 2026. As a result, capacity reduction is likely to continue, with larger fleets seeing the effects in the new year.
In Q4, spot and contract rates continue to follow seasonal trends. For 2025, spot rates are slightly higher than last year, trending between 0% and 5%, and contract rates are up about 1% to 2% YoY.
For 2026, spot rates are expected to rise gradually as capacity exits the market. But if the FMCSA regulation on non-domiciled carriers passes, it’s estimated that around 200,000 drivers would be removed from the freight market. This could cause significant tightening, leading to double-digit growth in spot rates.
Contract rates should remain steady in H1 2026, but rise in H2. If the construction and manufacturing sectors recover, flatbed rates are also expected to increase. Van and reefer rates should remain balanced, with the potential for slight growth due to tightening capacity.
Because there are two potential market scenarios in 2026—either baseline with low rate increases or significant tightening—shippers should focus on scenario planning for each to remain resilient. Shippers should also prioritize and invest in strategic carrier relationships and transition to flexible pricing models, like cost-plus or index-based pricing, to protect their routing guides from market tightening.
Our recommendations:
For shippers:
Lock in contract rates early while the market remains relatively soft.
Diversify carriers, including reliable midsize fleets, to protect against potential capacity tightening.
Establish strategic relationships with key providers in your network and strengthen carrier relationships.
Forecast collaboratively with carriers to help them plan capacity during a slower-growth year.
Use data-driven lane analysis to identify which lanes need contracts and which can float in spot.
For carriers:
Focus on building strong relationships with shippers who value long-term partnerships and prioritize fair rates.
Optimize operations and improve efficiency to maintain profitability in a potentially volatile market.
Stay informed about market trends and adjust pricing strategies accordingly.
LTL market: Focus on efficiency and collaboration
LTL trends have remained relatively unchanged since April 2023. While LTL service is still strong, demand is weak due to the consolidated market.
Currently, LTL volume ranges from flat to slightly down YoY. For Q1 2026, bid activity is expected to remain high as shippers aim to lock in rates before a market shift, but there likely won’t be new volume or substantial changes to pricing.
Throughout 2026, there could be an increase in volume, but since carriers have between 10% to 30% of capacity available, this will be absorbed. If this occurs, pricing will likely increase by around 3% to 5%.
Our recommendations:
For shippers:
Balance your portfolio of carriers by aligning with strategic partners.
Ensure accurate bills of lading and proper freight classification to help reduce costs and drive carrier efficiency.
Use the current market conditions to negotiate competitive rates and secure capacity for your LTL shipments. This includes renewing with higher service incumbents and using niche regional, sub-regional, or low-cost carriers.
Embrace technology solutions to streamline procurement and improve efficiency.
Prioritize best practices, including productive carrier collaboration, data-driven pricing strategies, and packaging improvements.
Manage costs by understanding what is driving carrier pricing and consider alternatives for those lanes and/or products.
For carriers:
Seek strategic growth partners with a high degree of tech enablement to help drive cost-out initiatives.
Continue to invest in technology and internal efficiencies to maintain profitability.
Collaborate with shippers to optimize operations and improve service levels.
Cross-border shipping: Addressing challenges
With changing policies and market uncertainty, shippers and carriers need to be aware of the unique challenges in each region. Capacity, freight volume, cargo theft, and economic uncertainty are all factors that can impact cross-border operations.
In Mexico, the National Chamber of Freight Transport (CANACAR) has reported disruptions across supply chains and logistic operations in Mexico-U.S. corridors due to UNTA-led blockades. Additionally, the U.S. Department of Transportation’s requirements for English proficiency and its review of foreign CDLs could worsen the driver shortage. Currently, more than 70% of B1 drivers may not meet DOT’s language requirements.
On the demand side, the semiconductor shortage and uncertainty surrounding the United States-Mexico-Canada Agreement (USMCA) affected vehicle production, resulting in a 3.7% decrease in October. However, despite tariffs on metals and auto parts, supply chains are adapting. Several auto companies, like Mazda, Honda, and General Motors, have increased local sourcing and diversified suppliers to reduce risk.
In 2026, shippers and carriers should continue to plan for ongoing challenges and disruptions. Mexico is hosting the 2026 FIFA World Cup, and shippers and carriers should prepare for logistical challenges and increased congestion. A review of the USMCA will also take place in July to determine whether it should be extended or modified. This could result in stricter rules of origin, more scrutiny of Asian products, and additional regional content requirements.
In Canada, the manufacturing sector continued to decline in Q4. Even so, manufacturing sentiment is high, indicating a positive outlook heading into the new year. Although carriers continue to face headwinds from legislation and high interest rates, they remain active in the spot market for margin opportunities. However, these headwinds have resulted in shippers seeing higher replacement rates for 2026 contracts.
Our recommendations:
For shippers:
In Mexico, remain flexible to optimize operations and strengthen partnerships with incumbent carriers. Implement alternate border crossings, transloading, and different transportation modes, and respond proactively to changing conditions.
In Canada, maintain access to capacity through RFQs or mini-bids as the market rebalances, and optimize cross-border flows by utilizing zone skipping or non-resident importer status.
For both regions, seek to implement network efficiencies with technology solutions, such as Uber Freight's Canadian LTL services, and work closely with your Uber Freight representative to anticipate regulatory changes, tariff impacts, and shifting trade conditions.
For carriers:
Prioritize securing consistent volume and keeping trucks moving.
Invest in security measures to protect cargo from theft.
Stay informed about economic and regulatory changes in each country.
Looking ahead: Preparing for multiple scenarios
The fourth quarter of 2025 will be a pivotal time for the freight market. Evolving trade policies and market changes during this time will likely affect the first half of 2026. Weak equipment sales and new regulations targeting non-domiciled carriers could affect the second half. Shippers and carriers should stay informed about market trends, leverage technology to improve efficiency, and build strong relationships with their partners. By staying agile and proactive, logistics professionals can navigate the challenges and capitalize on the opportunities that lie ahead.
For a more in-depth look at the freight market in Q4 2025 and what’s to come in 2026, including additional insights on U.S. intermodal and warehousing, read the full Q4 Market Update and Outlook Report.
*All data is generated by Uber Freight internal indices using a weighted combination of truck and driver availability for supply, and manufacturing output, goods consumption, imports and exports for demand.