The U.S. freight market gave back much of its second-quarter momentum in Q3 as shipment volumes slipped and shipper spend edged higher — a combination that points to ongoing demand softness but hints at gradual capacity tightening. That’s the picture painted by FreightWaves’ analysis of the third quarter, which shows the brief spring/summer rebound didn’t stick heading into the fall bid season.
Fresh October data suggest why Q3 felt weaker and how Q4 is setting up. The Logistics Managers’ Index held steady at 57.4 in October, but the internals flipped mid‑month: transportation utilization rebounded into expansion and transportation prices accelerated, even as inventories contracted. In other words, freight that sat early in the month started moving, lifting price pressure as capacity inched tighter — a dynamic carriers have been waiting on heading into peak retail weeks.
Industrial freight remains a drag. The ISM manufacturing PMI fell to 48.7 in October, its eighth straight month in contraction, as new orders softened and supplier delivery times lengthened amid tariff uncertainty. For truckload carriers tethered to factory output, that means fewer heavy industrial loads to offset retail seasonality, keeping volumes choppy market‑to‑market.
Rail — a good read‑through for longer‑haul goods flows and intermodal competition — also cooled to start November. For the week ending November 1, U.S. rail traffic fell 3.9% year over year, with intermodal units down 6.4%. That pullback reinforces the view that the tariff‑front‑loaded import wave has tapered and that domestic surface transport demand is normalizing at a lower level than the Q3 highs.
Fleets are acting accordingly. Preliminary North American Class 8 orders in October rose 18% from September to 24,300 units but were still 22% below a year ago — the tenth straight annual decline — signaling that many carriers are deferring replacements and growth until freight fundamentals improve. Cautious equipment ordering supports the thesis that excess capacity is slowly bleeding out, which can firm pricing even if loads are scarce.
What this means for carriers: expect rate discussions to tilt more toward service and reliability than raw volume, with pockets of pricing traction where utilization has improved and where retail flows are strongest. Thin industrial pipelines argue for disciplined network planning, tighter control of empty miles, and selective exposure to project and seasonal freight. For shippers: Q3’s drop in shipments alongside steady‑to‑higher spend is an early warning that the era of “name your price” is fading in certain lanes; locking in commitments before year‑end while monitoring transportation price indices and intermodal trends could mitigate spot‑market surprises. The mid‑October inflection in the LMI’s transportation components and the early‑November slowdown in rail volumes are your tells as you set 2026 contracts.
Bottom line: Q3 confirmed that demand alone won’t rescue this market, but the ingredients for a gradual re‑balancing — modest capacity exit, firmer utilization, and selective price resilience — are finally in the mix. If manufacturing stabilizes and inventory turns quicken through the holidays, Q4 could look less like a relapse and more like the base of a slow climb.
Sources: FreightWaves, Logistics Managers’ Index, Reuters, Association of American Railroads, AJOT
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