Freight market sees Covid-era extremes return

A monthly survey of supply chain managers showed extreme capacity tightening and rate growth across the freight market in March, a dynamic last seen at “the height of the Covid era freight boom.” The Logistics Managers’ Index—a diffusion index in which a reading above 50 indicates expansion, while one below 50 signals contraction—returned a reading of 39.

2 for transportation capacity and 89. 4 for transportation pricing in March. The 50. 2-percentage-point gap was “the highest positive inversion since November 2021,” the Tuesday report said. Capacity stepped 1. 8 points lower in March, which marked a fourth consecutive month of contraction. Pricing jumped 12.

7 points to the fastest growth rate since March 2022. The report said part of the runup in pricing was tied to the Iran war, however, heightened regulatory enforcement (English-language proficiency requirements, non-domiciled CDL restrictions, a crackdown on ELD providers and forced driver school closures) has significantly drawn down truck capacity.

The pricing dataset surged in the back half of March, increasing from 81. 9 in the first two weeks of the month to 94 in the last two weeks. (Capacity stepped down from 44. 4 to 36 over the same period.) Small companies (less than 1,000 employees) returned a 92. 7 reading for pricing, which was 8 points higher than sentiment among large companies.

Transportation utilization (62. 9) moved 1 point higher during the month. Logistics managers surveyed expect the transportation market to remain very tight over the next 12 months, returning future readings of 34. 9 for capacity, 67. 9 for utilization and 93 for pricing. SONAR: Outbound Tender Rejection Index (OTRI.

USA) for 2026 (blue shaded area), 2025 (yellow line), 2024 (green line) and 2023 (pink line). A proxy for truck capacity, the tender rejection index shows the number of loads being rejected by carriers. Current tender rejections show a tightened truckload market. To learn more about SONAR, click here. SONAR: National Truckload Index (linehaul only – NTIL.

USA) for 2026 (blue shaded area), 2025 (yellow line), 2024 (green line) and 2023 (pink line). The NTIL is based on an average of booked spot dry van loads from 250,000 lanes. The NTIL is a seven-day moving average of linehaul spot rates excluding fuel. Spot rates stepped higher through peak season as regulatory constraints on the driver pool took hold.

Severe winter weather amid a tighter capacity backdrop kept rates elevated. Rates are still notably higher on a y/y comparison in April. Inventory levels (54. 8) were up 1 point in March.

The modest expansion rate occurred as companies are again running just-in-time strategies versus the just-in-case approach used amid widespread stockouts during the pandemic. By comparison, the inventory index was nearly 21 points higher in March 2022. Large firms, which include big box retailers, returned a March 2026 inventory reading of 62.

5 compared to no change (50) at small firms. The report said the index average is 59, “suggesting that firms are continuing to be cautious on inventory buildups.” Also, elevated carrying costs (interest rates and warehouse rents) are forcing companies to hold less merchandise. Inventory costs (76. 2) continued to accelerate, up 8.

4 points from February, with large firms reporting higher costs (82. 8) given their higher stock levels. However, small firms saw an inventory cost increase (72) even though their merchandise levels were unchanged.

“With the current leanness of inventories, firms will not have large stores of goods and components to draw on, which may necessitate some continued movement in freight,” the report said. “The leanness extends to fleet sizes as well, which have right-sized considerably since 2022, meaning there will be less excess capacity this time around.”

The report cautioned that elevated energy prices and already-high goods prices could curb demand, leading to declines in freight shipments.

It also noted that shippers are stuck between “a rock and a hard place” as tariffs have forced them to be more selective with inventory decisions, but higher fuel costs may push them to consolidate loads and maximize utilization (fill trailers and containers). “The transportation market seems to be booming and inventories are lean,” the report said.

“However, the possibility for stockouts due to that leanness, as well as possible demand destruction due to increasing costs are realistic possibilities. “Supply chains are more flexible than they were four years ago, but it remains to be seen how exactly this unique set of circumstances will impact the logistics industry going forward.”

The overall LMI stood at 65. 7, 4. 2 points higher than February and the fastest growth rate since May 2022. Warehousing capacity (46) tightened 4 points in the month as utilization (59. 8) remained expansionary, but came in 50 basis points lower than in February. Warehousing prices (67. 4) remained inflationary, up 4. 8 points.

Aggregate logistics costs (inve