🎣 2025 Recovery Signs

Good Morning. Today’s newsletter dives into freight market recovery signs for 2025—are we finally seeing the light at the end of the tunnel?

Plus:

• 🏧 Trucking Credit Woes
• 🇲🇽 Rising Cargo Theft in Mexico
• 🚛 Kal Freight Inc. Files for Bankruptcy
• & more...

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🐔 WHAT’S COOKIN’ IN FREIGHT

🏧 Rising Credit Woes in Trucking. BMO's transportation loan portfolio, primarily tied to trucking, showed worsening credit conditions in Q4 2024 despite hefty Q3 provisions. Provisions for credit losses surged to CA$85 million, up from CA$77 million in Q3, marking a record high since BMO acquired GE Capital's transportation operations in 2015. The gross book of transportation loans declined to CA$14.6 billion, with 67% tied to US clients. Essentially, these numbers show these businesses are struggling with loan repayments. For brokers, rising financial instability among small and mid-sized carriers could squeeze capacity and lead to rate volatility. For lenders, trucking businesses are becoming an increasingly high-risk bet.

🏛 Kal Freight Inc. Files for Chapter 11 Bankruptcy. California-based trucking company Kal Freight Inc. announced its Chapter 11 bankruptcy filing on December 5, 2024, citing liquidity challenges that hinder debt repayment and business operations. Despite the filing, Kal Freight plans to continue day-to-day operations, supported by debtor-in-possession financing. The company assures employees, vendors, and customers of uninterrupted services, including full employee payments and adherence to supplier terms. Established in 2014, Kal Freight operates 580 trucks and employs 600 drivers across multiple US locations. The company specializes in FTL, Dry Van, Dedicated, and Expedited services and seeks to restructure while maintaining fleet safety and service reliability.

🚨 Rising Cargo Theft Violence Threatens Mexican Truckers. Violent cargo theft in Mexico surged, with 83% of incidents involving violence in Q3, according to Overhaul. Key hotspots include the states of Mexico (Edomex), Puebla, and Guanajuato. Food and beverages were the most targeted goods, accounting for 31% of thefts. Criminals primarily intercept trucks in transit (72%), while unsecured parking thefts account for 27%. Despite challenges, the National Guard’s Balam strategy has reduced highway robbery by 8.8%, recovered 225 vehicles, recovered 77,000 gallons of stolen fuel, and led to 33 arrests. The strategy involved deploying 456 patrol cars, 37 drones, two helicopters, one aircraft, and 23 investigation units across Mexico's federal highways.

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Freight's Turning Point: 2025 Recovery Signs to Watch

After two tough years, the freight market is finally showing signs of life. While a full rebound isn’t here yet, experts say the floor is behind us—and shippers, carriers, and brokers should start prepping for what comes next.

A Tightening Market is Already Rebalancing

FreightWaves’ data shows contract pricing is inching up as shippers brace for a tighter capacity market next year.

• Tender rejections—a key indicator of tightening capacity—hit bottom in May 2023 and has been climbing ever since.
• Shippers facing service disruptions are already rebidding contracts and issuing mini-bids as rates begin to favor carriers.

Ryan Grote, FreightWaves supply chain analyst said:

"Roughly 70% of freight moves under contract, and the fact that we’re already seeing those prices start to appreciate I think is another signal that the bottom of the recession is in the past, and we’re now in a tightening cycle."

OOIDA Sees Upcycle Signs—But Cautions Remain

The Owner-Operator Independent Drivers (OOIDA) Foundation echoes this optimism in its November report. Freight volumes remain flat, but stabilizing capacity and rising rates lay the groundwork for an upcycle:

• Inventory levels are improving.
• Operating costs are stabilizing.
• Seasonal patterns—like holiday demand—are finally returning.

“We’re climbing out of the bottom,” said OOIDA’s Andrew King. However, he warns that manufacturing, which generates 60% of for-hire freight, still lags. King predicts a stronger freight market by Q2 2025, driven by industrial recovery.

Global Trade Boom: $33 Trillion Threatened

While domestic freight shows promise, the global stage adds layers of uncertainty. The United Nations Conference on Trade and Development (UNCTAD) forecasts global trade to hit $33 trillion in 2024—a record high.

However, new U.S. trade policies could disrupt supply chains:

• Tariffs under a new administration might hit countries like China, India, and the EU, impacting trade volumes and logistics demand.
• "Even the threat of tariffs weakens investment and growth," said UNCTAD Secretary-General Rebeca Grynspan.

For shippers and carriers, this uncertainty underscores the importance of nearshoring strategies and supply chain diversification heading into 2025.

So what’s next? FreightWaves’ Zach Strickland says spring 2025 could be a turning point:

“The home improvement and housing sectors, dormant since COVID, could wake up in March and April, driving major demand.”

Spring 2025: A Freight Wake-Up Call?

Combine that with early contract renegotiations, tighter capacity, and returning seasonality, and Q2 2025 is shaping up to be the freight market’s long-awaited comeback.

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🌎 AROUND THE FREIGHT WEB

🚛 Underground Springfield Delivery. See a driver’s delivery inside Springfield Underground, a 3.2M sq. ft. climate-controlled facility with rail and highway access.

💼 Parting Ways. Forward Air parted ways with President and COO Chris Ruble “without cause” as it works to stabilize after the Omni Logistics merger fallout.

🏛 Recruiter Sentenced. Heriberto Lopez-Landeros, who recruited truck drivers to transport drugs across borders, was sentenced to 14 years in prison for his illegal operations.

🌍 Trade Policy Changes. Significant updates are slated for US trade policy in early 2025, ranging from no more duty-free imports from China to Section 321 strategy going away.

🇨🇦 Canada’s Worry. Canada’s trade surplus with the US helped offset a broader deficit, though with the Trump tariffs threat, the country worries if that deficit would return should the tariffs take effect.

🎣 THE FREIGHT CAVIAR CORNER

• Podcast: Our interview with HappyRobot is dropping later today! Don’t miss it—we’ll explore how AI is transforming carrier sales. Follow us on Apple Podcasts, Spotify, or YouTube to be notified when it’s live.
• Conferences: Join us at Manifest Vegas 2025. Register with our link and save $200 on the current price!
• Find Shippers Fast: Looking for customers? Check out ShipperCRM, the world's largest shipper database, and apply for access here.

FREIGHT MEME OF THE DAY