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The results of the 2025 holiday season stress test revealed a freight market that is functioning very differently from how it did a year ago.
As severe weather and other seasonal factors drove a strong spike in tender rejections, more freight moved to the spot market and rates rose sharply. Though that pattern is typical of the holiday period, this year, carrier pricing behavior became more aggressive as spot market leverage increased, driving December spot rates to the highest point in several years.
While rates remain elevated on a year-over-year basis, volatility was beginning to subside as of mid-January, but a major winter storm now threatens to interrupt that normalization.
Uncertainty around the storm’s path and potential severity makes its long-term impact on the freight market hard to predict, but widespread ice and snow are likely to create meaningful near-term capacity disruption and rate volatility, particularly in regions not accustomed to such conditions. Pent-up demand could also drive continued cost volatility once conditions improve and delayed shipments reenter the market.
Looking beyond the storm, the market’s holiday response clearly showed increased vulnerability, but a sustained disruption will still require a meaningful demand catalyst or capacity event that occurs in line with elevated seasonal demand, such as the summer peak.
There are several upside demand risks at play as we enter the new year. Greater clarity around tariff and trade policy would deliver the most immediate positive impact to demand, but when that clarity will arrive and to what degree it would benefit volumes is challenging to predict at this point. Beyond that, interest rate cuts, possible stimulus actions, sustained consumer strength and inventory replenishment would all help drive demand on a longer timeline.
That’s why, instead of a sustained disruption, our 2026 outlook calls for continued rate inflation with periods of significant volatility around typical seasonal pressure points. Importantly, while rates are expected to normalize following these surges, they are unlikely to return to pre-disruption levels and will remain elevated on a year-over-year basis.
For more data and insights on the key trends shaping the market as 2026 gets underway, read on.
Demand conditions through December were shaped primarily by seasonal disruption rather than underlying volume growth. As tender rejections climbed during the holiday period, spot market activity increased, persisting into early January before beginning to fade as seasonal pressures eased. Contract volumes have not yet fully rebounded following the holidays, reflecting continued softness outside of disruption-driven demand.
While upside risks exist, the demand outlook for 2026 remains unclear. One possible path forward is that continued tariff uncertainty suppresses demand and helps stabilize conditions. The other is that improved economic conditions, policy shifts or potential stimulus efforts ahead of the midterm elections drive a demand rebound. But with no clear catalyst in place, volumes will remain driven by seasonality for now.
Supply continued to tighten through December as operating costs remained elevated and regulatory scrutiny increased. Winter weather disruptions and drivers taking time off compounded those pressures, contributing to the greatest spot rate volatility seen in several years.
An imminent winter storm is expected to create significant capacity disruptions, though the duration and magnitude will depend on the severity and geographic reach of the storm. Beyond that, without a meaningful demand rebound, supply erosion is likely to continue, leaving the market increasingly vulnerable to even modest demand shocks in 2026.
Spot rates surged in December due to seasonal pressures and shifts in carrier pricing behavior. Notably, reefer rates crossed contract for the first time in two years. Fuel costs also declined sharply and have stabilized at a lower level, providing some all-in rate relief for shippers.
Rates are expected to ease into February and March as seasonal pressures fade, though the scale and duration of any decline will be shaped by the severity and geographic reach of the pending winter storm. More broadly, our forecast calls for increased seasonal rate volatility throughout 2026, with rates remaining elevated on a year-over-year basis following periods of disruption.
Manufacturing contracted further through December as economic uncertainty continued to weigh on business investment. On the consumer side, holiday spending remained resilient. Retail sales outperformed expectations, growing modestly year-over-year even as signs of labor market softening emerged late in the quarter.
Greater clarity around trade and tariff policy will be necessary to unlock the investment needed to jumpstart a manufacturing rebound, and the impact of such a turnaround would likely not reach freight volumes for several months. Beyond that, tariff-related inflation remains the key downside risk for freight demand, while consumer strength, Fed rate cuts, IEEPA rulings and potential government stimulus ahead of the midterm elections present upside risks.
Throughout December, inbound Canadian capacity tightened significantly due to a lane imbalance favoring inbound freight, allowing carriers to push rates higher. Seasonal driver time off and winter weather further constrained supply, impacting rates on intra-Canada shipments.
Elevated trade tensions with the U.S. are expected to continue limiting exports from Canada, creating a demand flow imbalance that could drive ongoing rate volatility on inbound shipments. At the same time, improved trade relations with other global partners should help offset some of that lost export demand as new trade lanes develop. Capacity is expected to remain tight through at least the end of the winter season, while continued regulatory enforcement affecting drivers and driver pools will likely reduce capacity further and apply upward pressure on rates as the year progresses.
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Matt Pyatt is the Chief Executive Officer of Arrive Logistics. He co-founded Arrive with President Eric Dunigan in 2014 after building his career at Command Transportation. As CEO, he is responsible for overseeing the company’s financial health, strategic vision and culture, as well as building a scalable leadership team to support Arrive’s growth.
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Scott Sandager is the Chief Administrative Officer at Arrive Logistics. He joined Arrive in 2018, bringing over 14 years of logistics and brokerage experience, with expertise in project and change management, organizational design, talent development and customer satisfaction. Scott previously held many diverse roles of increasing responsibility with AFN, a Chicago-based freight brokerage.
Eric Dunigan is the President of Arrive Logistics. He began his career at Command Transportation before co-founding Arrive with Matt Pyatt in 2014. As president, he is responsible for driving revenue and growth, as well as leading the Strategic Partnerships team — a veteran group of supply chain experts who work with Arrive’s customers to reimagine their shipping strategy.
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David Spencer is the Vice President of Market Intelligence at Arrive Logistics. David joined Arrive in 2017 after spending six years at AFN focused on business intelligence. His department provides critical market data and expert analysis to internal teams and publishes monthly market updates for shippers and carriers under the Arrive Insights banner.
Andrew Clarke is Board Chairman for Global Critical and DCLI, Inc., and a board member for Arrive Logistics and Element Fleet Management Corp. His 20 years of global transportation and logistics experience include time as CFO of C.H. Robinson, CEO of Panther Expedited Services, Inc. and SVP and CFO roles at Forward Air Corporation.
Dean Croke is a Market Analyst at DAT Solutions, where he focuses on freight market intelligence and data analytics. His 35 years of experience with data analytics, transportation, supply chain management, mining and insurance risk management include time as co-founder of FleetRisk Advisors and in a number of other high-level roles with FreightWaves, Spireon, Lancer Insurance, Omnitracs Analytics (formerly Qualcomm) and more.
Asanka Jayasuriya is the CTO at 8VC. He is an accomplished engineering and product leader with 20+ years of experience in the cloud. He has a strong background in enterprise SaaS, PLG products, infrastructure, and security. Notably, he served as CTO and SVP of Engineering at SailPoint, leading their successful transition to the cloud and successful exit event. He also held senior leadership roles at InVision, Atlassian, and Amazon, driving growth, operational excellence, and innovation. At 8VC, Asanka works with the entrepreneurs and leaders in our portfolio as a virtual CTO supporting their growth.
Chad Eichelberger is the President of Reliance Partners. Since 2015, he’s leveraged his extensive experience in risk management, compliance, best practices and contracts to lead the company’s logistics and truck insurance strategy and operations. Chad was previously the President of Access America Transport, where he led the company from $8M to over $600M in revenue.
Barry Conlon is the CEO and founder of Overhaul, the global leader in active supply chain risk management and intelligence. With a remarkable career spanning over 30 years in supply chain security, he is widely regarded as a trailblazer in modern-day supply chain security standards and best practices.
As VP and Senior Analyst at ACT Research, Tim analyzes commercial vehicle demand and alternative powertrain development (i.e. electrification), and authors the ACT Freight Forecast, U.S. Rate and Volume Outlook. He previously spent fifteen years in equity research focused primarily on the transportation, machinery, and automotive industries, and co-founded leading equity research firm Wolfe Research.
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