Rising operational costs, tightening margins and an oversaturated market have left many truckers struggling to pay their bills. The boom-and-bust cycle that followed the COVID-19 pandemic caused an influx of new carriers, only for demand to drop, leading to fierce competition and unsustainable freight rates.
It’s a period of uncertainty, to say the least.
But there’s light at the end of the tunnel. You might be wondering, “When will freight rates go up?” The answer is they have already started to turn, and analysts predict they will continue to climb. For intermodal carriers, this signals a potential inflection point, one that presents significant opportunities for growth and profitability.
But before we reveal five ways to take advantage of rising freight rates, let’s look at what caused the freight market recession.
The Shifting Freight Market Since 2020
To understand the optimism surrounding freight rates today, consider how the industry responded to the events of 2020.
During the pandemic, surging consumer demand led to a massive influx of new carriers entering the market. With high rates and an abundance of freight to move, many independent truckers and small carriers saw an opportunity to get in on the game. However, as consumer spending normalized, demand cooled and left too many carriers fighting for the same loads. This led to a sharp decline in freight rates, making it difficult for many trucking businesses to survive.
In response to these conditions, a significant number of carriers that entered the market around 2020 have since exited. This exodus has helped stabilize the freight market, bringing supply and demand back into balance and ultimately paving the way for today’s rising freight rates.
Freight Rates Are Climbing Again & Here’s Why
Freight market conditions are shifting in favor of carriers, leading to increased freight rates. Analysts predict rates will rise at least 4%, with some expecting as much as a 6% increase. Spot rates have surged to $2.52 per mile—the highest in two years—indicating a market recovery that could benefit intermodal carriers. Several factors are driving this upward trend:
Increased Fuel Costs
Fuel prices remain a vital cost driver in the logistics sector. Rising oil prices have pushed up the cost of bunker fuel for cargo ships and diesel for trucks, directly impacting freight rates. As carriers face higher operational costs, these expenses are passed on to shippers, contributing to rate increases.
Supply Chain Disruptions
Global supply chain issues, including port congestion and geopolitical tensions, have made freight capacity more valuable. As shippers look for reliable transportation solutions, they are willing to pay higher rates to secure space and avoid delays.
Increased Demand
Despite economic uncertainties, demand for freight services is showing signs of resilience. E-commerce, seasonal shipping needs and a rebound in manufacturing are all driving higher volumes. As a result, freight rates trend upward.
Some industry experts have even declared that the freight recession is over, full stop. Here at RTS, we think it’s too soon to call. But now that we know that rates are rising, the big question becomes: How can you take advantage of it?
How Can Intermodal Carriers Take Advantage of Rising Rates?
With a favorable intermodal freight transportation market emerging, intermodal carriers can make these five strategic moves to maximize their profits:
Optimize Pricing Strategies
Carriers should reassess their pricing models to reflect rising demand and operational costs. Implementing dynamic pricing strategies that adjust rates based on seasonality, fuel costs and market trends can help maximize revenue while staying competitive.
Target High-Margin Freight & Long-Term Contracts
Rather than relying solely on the volatile spot market, intermodal carriers should also secure long-term contracts at favorable rates. Additionally, focusing on high-margin freight, such as temperature-sensitive goods or e-commerce-related shipments, can boost profitability.
Take Advantage of Used Truck Prices
The wave of new carriers entering the market during the pandemic drove up the prices of used trucks. However, as many carriers have departed, used truck prices have now returned to pre-pandemic levels. If you’re a carrier looking to expand your fleet, you should act now before rising rates attract new entrants, driving equipment costs back up.
Strengthen Rail & Drayage Partnerships
Intermodal success depends on the coordination of rail and trucking. Strengthening relationships with railroads and drayage providers can lead to better service agreements, priority scheduling and improved last-mile efficiency.
Diversify Service Offerings
The rise of freight rates in 2025 could allow you and your team to create additional revenue streams. Expanding into warehousing, transloading or dedicated contract logistics is always a possibility. Offering these value-added services can help deepen relationships with shippers and enhance overall profitability.
Freight Market Predictions for 2025 & How to Respond
The expectation is that freight rates will continue to rise in the coming months. March, traditionally a significant period for our industry, will provide a clearer picture of what to expect moving forward. As the industry enters a period of renewed opportunity, carriers that position themselves strategically will benefit the most from the market’s recovery.
Intermodal carriers can further optimize their financial position by leveraging factoring services, fuel discounts, insurance solutions and equipment financing through industry leaders like RTS. These tools can provide the liquidity and cost savings needed to skillfully navigate the market.
While nothing is guaranteed, rising freight rates are more than just a temporary uptick. They’re a sign of market recovery and a catalyst for intermodal carriers to seize new growth opportunities. Now is the time to act and capitalize on the ever-shifting landscape to ensure your success in a competitive industry.
Looking to get ahead of an expected freight market rebound? Talk to our team today and learn how your business can position itself for long-term growth!