Beneath the surface of America's bustling logistics networks lies a complex economic ecosystem where supply meets demand in often unpredictable ways. The TD Cowen/AFS Freight Index has emerged as an essential tool for deciphering these market dynamics, offering unprecedented visibility into pricing trends across truckload, less-than-truckload (LTL), and parcel shipping segments.
The Pulse of American Commerce
At first glance, the U.S. freight market appears robust - warehouses operate around the clock, trucks crisscross the nation's highways, and e-commerce continues its relentless growth. Yet this visible activity masks underlying challenges: compressed profit margins, capacity imbalances, and volatile pricing that test the resilience of logistics providers.
The TD Cowen/AFS Freight Index, launched in October 2021 through collaboration between investment bank TD Cowen and logistics firm AFS, functions as both diagnostic tool and predictive model. By analyzing millions of shipping transactions and incorporating macroeconomic indicators, the index provides:
- Comprehensive market visibility across all freight modes
- Machine learning-powered rate forecasts
- Actionable intelligence for pricing and capacity planning
Data-Driven Market Intelligence
AFS Logistics contributes a proprietary dataset encompassing billions in annual freight spend across all transportation modes. This data foundation, combined with TD Cowen's analytical expertise, enables the index to:
1. Track carrier general rate increases (GRIs) and their market impact
2. Monitor fuel surcharge strategies across modes
3. Identify emerging pricing trends before they become apparent in public markets
Q1 2025 Market Outlook
Truckload: Persistent Oversupply
While spot rates show tentative recovery signs, contract pricing remains depressed due to excess capacity. The index forecasts Q1 2025 truckload rates stabilizing at 5.1% above 2018 baselines, representing minimal year-over-year growth. Carriers continue facing profitability challenges as linehaul costs hover 11.6% above pre-pandemic levels.
Parcel: Divergent Pricing Strategies
Carriers have implemented aggressive surcharge adjustments, with ground parcel accessorial fees jumping 16.4% quarter-over-quarter in Q4 2024. However, underlying demand weakness persists, particularly in express services where per-package rates remain barely above 2018 levels. The index anticipates 2025 GRI impacts will be partially offset by continued discounting activity.
LTL: Disciplined Pricing Under Pressure
Following Yellow Freight's 2023 bankruptcy, remaining LTL carriers maintained strong pricing power. However, Q4 2024 data reveals early signs of discipline erosion, with per-shipment costs declining faster than weight reductions would justify. Fuel surcharge reductions outpaced diesel price drops, suggesting carriers may be competing more aggressively for volume.
Strategic Implications
The index's predictive capabilities enable shippers and carriers to:
- Optimize contract timing based on rate forecasts
- Align capacity investments with market cycles
- Develop data-driven surcharge strategies
- Identify modal shift opportunities
As AFS CEO Andy Dyer observes, while macroeconomic indicators show tentative improvement, fundamental supply-demand imbalances will continue shaping the 2025 freight landscape. The index provides the analytical framework to navigate these challenges successfully.