A sooner-than-anticipated influx of US imports from China is already pushing up ocean container spot rates, but those price increases are not expected to reach landbound drayage and truckload markets.

A thick layer of excess truck capacity persists and may even be expanding, and that is likely to keep land transportation pricing in check despite US importers frontloading freight during a 90-day pause in the steepest tariffs on Chinese-made goods.

“Right now, we don't see enough capacity exits to lead us to believe that [truckload] rates are going to be higher,”even as more cargo from China arrives over the next 90 days, Sean Dehan, vice president of corporate strategy and mergers and acquisitions at Truckstop, said Friday.

Truckstop, a spot market load-matching and trucking technology company, still expects some greater interplay between spot truckload and drayage in coming weeks.

“Drayage drivers could effectively go into power-only mode,”meaning they could use their tractors on the spot market to haul trailers, Dehan said.“There may be some marginal drayage carriers who pop into over-the-road even as import volumes stay measured.”

Supply-demand imbalance

Surface freight demand has been in recession since the second quarter of 2022, and even a large increase in imports, which only account for a small portion of overall over-the-road tonnage, likely won't be enough to resuscitate demand.

“There don't appear to be too many demand catalysts that we can point to right now,”Dehan said.“Tariffs are not going to create demand.”

At the same time, truck capacity is readily available, whether at the ports or on highways. There is still about 35% more over-the-road truckload capacity available than in 2019, according to Avery Vise, vice president of trucking for FTR Transportation Intelligence.

Most instances where freight activity has increased in the past few months can be attributed to frontloaded US imports. Spot market load board provider DAT Freight & Analytics noted increased activity around major distribution hubs in April.

“The big warehouse markets — Atlanta, Dallas, Phoenix — have all seen a big influx of loads moved in April, both inbound and outbound,”Dean Croke, principal analyst at DAT, told the Journal of Commerce.

But that hasn't moved spot pricing.

Average US dry-van spot rates for the week ending May 10 of $1.60 per mile were up just three cents from the same week a year ago, according to DAT, while the average contract replacement rate slipped 0.5% sequentially during the same week.

“Overall, we continue to observe a consistent market,”Aaron LaGanke, vice president of freight services at logistics provider AFS Logistics, said Thursday.“Minor month-to-month fluctuations in rates and volumes remain within the bounds of typical variability.”

The wild card is going to be the size and extent of the rebound once fresh imports from China and other trading partners hit US ports.

Demand“may be a little bit slack for four weeks, and then it will hit in June,”said Paul Brashier, vice president of global supply chain at drayage brokerage ITS Logistics.“We won't see COVID-level disruption, but it will be a lift, and it's on the way.”