As 2026 opens, less-than-truckload (LTL) carriers are defying gravity by keeping rates high despite a slowdown in volume. Meanwhile, truckload (TL) pricing shows flickers of recovery, even as questions about durability linger. This issue of our newsletter unpacks the sharp contrasts and subtle shifts across modes, from weather-driven spot rate surges to legal battles that could reshape the employment model for final-mile drivers.
We also explore quiet but persistent investments in sustainable packaging, an area where regulation is now shaping action more than marketing. Whether you’re a shipper seeking clarity or a carrier bracing for volatility, this edition of our newsletter captures the freight economy’s unpredictable terrain.
Carriers Hold the Line: LTL Rates Hit Record Highs Despite Soft Demand
According to the TD Cowen/AFS Freight Index, LTL rates reached a new high in Q4 2025, climbing 67.9% above 2018 levels. It marks the ninth consecutive quarter of year-over-year growth in the section. Despite limited demand and declining manufacturing activity, Purchasing Managers’ Index (PMI) readings stayed recessionary at 47.9 in December. LTL carriers maintained pricing strength, avoiding concessions even as shipment weights and haul lengths dropped.
Meanwhile, TL data showed early signs of a turnaround, with the rate per mile up 240 bps year over year. However, cost inflation continues to outpace TL rates, compressing margins and stalling the broader recovery.
December Spike Doesn’t Signal Stability: Truckload Rates Still on Shaky Ground
U.S. truckload spot rates jumped by 19 cents per mile in December — up 9.1% year over year and reaching $2.46 per mile including fuel. Analysts have attributed much of the surge to short-term weather disruptions in the Midwest and Northeast, with Arrive Logistics and Michigan State experts doubting the price strength will hold into February.
The data backlog from the 43-day government shutdown and weak housing permits suggest deeper cracks, though. Despite a positive PMI reading (51.8), output outpaced new orders, echoing unsustainable production. Policy shifts, such as potential tariff rulings or restrictions on non-domiciled CDLs, could spark volatility. Economists warn that consumer strain from student loan garnishments may also mute freight demand.
Freight Volumes Hit New Low, But Rates Keep Climbing Amid Capacity Strain
Cass Information Systems reported a 7.5% year-over-year decline in December shipments, the lowest of the current cycle. With a two-year stacked decline of 13.5%, the freight slump reflects persistent volume weakness despite a 2.1% increase in truckload linehaul rates. Severe winter storms in early December throttled highway activity, creating a backlog that bled into January.
Cass’ expenditures index dipped just 0.6% year over year, suggesting that rates continued rising even as shipment volumes fell. The report noted that while milder January weather may temporarily boost volumes, the recent rate momentum may not hold. Capacity continues to shrink under new driver regulations, while lean inventories and a pending Supreme Court decision on IEEPA tariffs could jolt demand later in 2026.
Supreme Court Case Could Redefine Legal Status of Final-Mile Drivers
A U.S. Supreme Court case between Flowers Foods and a last-mile delivery contractor, Angelo Brock, questions whether drivers working entirely within one state can still be considered part of interstate commerce. The outcome will determine if such workers fall under the Federal Arbitration Act’s (FAA) exemption for transportation workers — letting them bypass mandatory arbitration in favor of litigation.
Brock, who delivers products like Tastykakes and Wonder Bread solely in Colorado, won in lower courts. Flowers argues that the exemption should apply only to those directly involved in cross-border transport. Legal observers note that inconsistent rulings across federal circuits created the need for Supreme Court clarity. And that decision could reshape how final-mile drivers settle workplace disputes nationwide.
Sustainability Stays on Track in Packaging, Even as Messaging Cools
While external messaging around sustainability has softened, companies remain committed to sustainable packaging investments, according to Bain & Co.’s 2026 paper and packaging outlook. Among 125 packaging buyers surveyed, 59% said they would switch suppliers within three years if sustainability targets weren’t met. The report stresses that regulation, rather than branding, is now reshaping the economy, especially as customers fall behind on their commitments.
Stable Freight Operations With Zengistics
Zengistics is a company that prioritizes shippers’ peace of mind above all else. Our goal is to achieve scalable growth and offer personalized solutions to optimize your supply chain nationwide. At Zengistics, we leverage technology to ensure that and more. We offer:
- Tailored Transportation: Shipping solutions tailored to your unique needs.
- Visibility & Transparency: Live tracking and monitoring to enhance your ability to plan and manage your shipping needs on demand.
- Predictive Analysis: Insightful information you can leverage to optimize your entire logistics operation.
- Dynamic Route Optimization: Transport bottlenecks on the usual route? No problem. Explore alternatives to ensure your cargo arrives at its destination on time and in the right condition.
Zengistics is the smarter option for more efficient logistics. Connect with us today.
