Midyear 2025
TRENDING
TRANSPORTATION / DISTRIBUTION / ECOMMERCE / MATERIAL HANDLING / INNOVATION
SUPPLY CHAIN
REAL ESTATE
Industrial real estate new supply decreased to lowest levels since 2019.
7.1%
Low
Warehouse asking rents rose 6% YoY. Rent growth is expected to stabilize as vacancy nears its peak and demand begins to strengthen.
Total space under construction hit its lowest level since 2018, with projections falling to 250 MSF by year-end—a 30% YoY drop.
The U.S. industrial vacancy rate rose slightly in Q1 2025, but the pace is slowing as new supply continues to decline.
Construction activity has dropped 61% since late 2022 and continues to decline across nearly all regions and markets.
Is this the true turning point in the freight market?
Source: FreightWaves
Prices outpaced capacity in May–June 2025 – the first time since Q1 2022 While capacity is falling, transportation prices rose for two straight months.
Oversupply continues despite rising rates Transportation capacity remains high amid weak demand, though spot and contract rates are climbing YoY.
Rebalancing isn’t expected until early 2026 Capacity was still abundant in June 2025, with long-standing oversupply in the U.S. trucking market.
Spot rates rose 9.1% YoY; contract rates up 1.4% These are the first inflationary contract gains since Q4 2022.
Shippers still hold leverage—for now But rising rates and tighter regional capacity hint that the freight recession may be easing.
Transportation Prices & Capacity 2023-2025
Transportation Prices
Transportation Capacity
DAT National Reefer Rates
Spot Rates
Contact Rates
DAT Load-to-Truck Ratio
2023
2024
2025
UPS Offers Buyouts to Drivers, a First in Its 117-Year History
Postal Service’s Air Cargo Shift from FedEx to UPS Creates Savings
English Language Proficiency Standards Could Drive Rates Higher
TOP INNOVATION TRENDS 2025
© 2025 Kenco Group | 2001 Riverside Drive, Chattanooga, TN | KencoGroup.com
Vacancy Rate
6%
Rent Growth
279 MSF
Construction Delivery
New Development
IN THE NEWS
Ground ^5.9%
vs.
Air ^8%)
AHS ^26%,
Oversize ^27-29%
Resi ^18%
"Headline" GRI only applies to "Base Transportation Charges"
Surcharges continue to surge at a higher rate than announced GRI
Minimum Charge increases vary by service
ABOUT KENCO
Kenco is a top-ranked, third-party logistics service provider. For over 75 years, Kenco’s clients have been the central focus of everything they do. Their team of logistics experts help companies achieve real results by providing agile best-in-class solutions, technology, and talent. Kenco’s strategic portfolio of integrated logistics solutions includes Distribution and eCommerce Fulfillment, Comprehensive Transportation Management, MHE Fleet Services, and innovative, data-driven Supply Chain Solutions — all engineered for operational excellence.
Visit Kenco at KencoGroup.com.
Parcel
In 2024, U.S. parcel volume saw significant growth, reaching 22.37B shipments – a 3.4% increase from 2023. This growth trend is expected to continue, with projections showing volumes reaching 30B by 2030. However, revenue growth hasn’t kept up with the rise in volume. In 2024, total revenue grew by 2.7% which is slower than the increase in parcel volume.
In 2025, parcel volume continues to climb, but carriers are facing new pressures—from surging surcharges and strategic realignments to revenue growth that lags behind rising demand.
ABF Defies the Downtrend
FedEx Prepares for a Major LTL Spin-Off
While XPO, Old Dominion, and FedEx saw declining volumes in May, ABF Freight reported increases in both tonnage and shipments—bucking the industry trend.
XPO, Old Dominion and FedEx all show tonnage and shipment being down. The one carrier who is showing a increase in both of these metrics in May is ABF.
The company’s asset-based segment, which includes results from less-than-truckload subsidiary ABF Freight, reported a 2% year-over-year increase in revenue per day during May, which followed a flat result in April, according to a filing with the Securities and Exchange Commission.
Why is ABF up and others down?
The volume increases were due to the easy comps created by a 22-month stretch of declines. ArcBest has used a dynamic pricing model, which provides discounts to fill available network capacity (and vice versa) during the soft stretch.
Overall, ArcBest noted more shipments from core accounts but said demand from manufacturing-tethered and household-moving customers remained soft.
FedEx Corp. has announced some of the new leaders for its less-than-truckload unit that is expected to be spun off into a new publicly traded company by June 2026.
John Smith, who is currently the chief operating officer of Federal Express (U.S. and Canada) will become president and CEO at the nation’s largest LTL carrier, FedEx Freight. Smith logged 25 years of service at FedEx Freight, serving as president and CEO from 2018 until 2021.
Smith will remain in his current role, which oversees leadership at FedEx Freight and the U.S. and Canada ground operations of Federal Express, until the separation occurs.
The consolidated FedEx enterprise continues to be overhauled through various initiatives that are expected to deliver $4 billion in cost savings. FedEx Freight has been working to improve freight mix, which includes heavier shipment weights and better density across the network. It has also been onboarding sales staff in recent months to drive the changes.
FedEx is restructuring leadership ahead of spinning off its LTL division by June 2026, while continuing efforts to improve shipment mix and network density.
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While XPO, Old Dominion, and FedEx saw declining volumes in May, ABF Freight reported increases in both tonnage and shipments—bucking the industry trend.
ABF Defies the Downtrend
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FedEx Prepares for a Major LTL Spin-Off
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FedEx is restructuring leadership ahead of spinning off its LTL division by June 2026, while continuing efforts to improve shipment mix and network density.
lTL
Transportation prices rose to 66.4 in June This marks the fourth consecutive month of price growth, reflecting continued pressure on base rates—even as diesel dropped to $3.49/gal.
Tonnage and shipment counts are down YoY Most LTL carriers are experiencing declines compared to the previous year.
Operating ratio (OR) is up YoY Only four carriers improved their OR from Q4 to Q1.
Knight-Swift saw the largest increase in average length of haul This supports their efforts to become the next fully national LTL provider.
Forward Air shifted from growth to profitability-focused pricing Business was shed and costs cut to align with this new philosophy, implemented mid-quarter—benefits are expected to be felt in 2Q25.
The LTL market is experiencing mixed signals, with pricing momentum continuing despite declining volumes and rising operating ratios.
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Major carriers face softening demand and shifting strategies, while ABF and FedEx take divergent approaches to navigate the evolving LTL landscape.
LTL Market News
lTL
TRANSPORTATION
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FedEx expects their air and ground networks will be combined across 250 centers by the end of fiscal 2025
May 9
David Steiner announced as the 76th postmaster general
July 13
USPS Ground Advantages rates expected to increase by as much as 10%
May 14
DHL eCommerce announces merger with EVRi, a major parcel carrier in the United Kingdom
May 12
FedEx renews their partnership with Amazon and will begin delivering packages for them again
CLICK TO EXPLORE MORE
Net Absorption is Expected to Stay in Positivey Territory
5 of 5
Intelligent video & AI provides superior visibility, visual evidence, insights in real time for every process.
Solves for quality issues, training gaps, missing information and the blame game when errors occur.
SiB
4 of 5
Orchestration of humans and various automation components.
Solves for many processes between automation and humans that are still very manual.
IoT Analytics
3 of 5
Pallet unloading and loading automation.
Solves for manual FTE-driven loading and unloading of pallets.
Gideon Robot
2 of 5
Generative AI model internal to Kenco for our LM systems using natural language and chat.
Solves for the need to use voice chat or chat to interact with Kenco’s labor management data.
Kenco Sensei
1 of 5
Single pane of glass for clients to monitor KPIs, engage in continuous improvement, and drive transformation.
Solves for multiple system dashboards and logins/inputs to find a single data point.
Stratos Distribution
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Real Estate
Innovation Trends
In the News
Transportation
Real Estate
Innovation Trends
In the News
Transportation
Here is a guide to make sure your Transportation team is prepared
Moving Forward
NMFTA changes are shaking up LTL starting July 2025.
Moving Forward
Preparing for Peak
Carriers will release updated transit tables specifically for peak season. Ensure you identify your impact and that you’re still meeting your customer expectations.
Peak surcharges are coming with some announced already. Begin conversations to see where they can be negotiated down so you can begin forecasting impact.
Moving Forward
Where performance is good, continue investing time and place financial value on incumbent carrier relationships. If you are always chasing the bottom, it can have long-term impacts.
Share volumes amongst providers on important higher volume lanes to ensure capacity options and knowledge of the business.
Look at shorter rate lock timeframes with Brokers in order to eliminate conservatism in rates. The longer the rate lock, the more a broker will build in buffer based on market uncertainty.
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ABF Defies the Downtrend
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