Looking at the freight transportation landscape with Jason Seidl, Managing Director, Industrials - Airfreight & Surface Transportation, TD Cowen

Logistics Management Group News Editor Jeff Berman recently interviewed Jason Seidl, Managing Director, Industrials - Airfreight & Surface Transportation, TD Cowen, at the SMC3 JumpStart 2025 conference in Atlanta. Topics covered included the freight economy, tariffs, and the state of the LTL and truckload markets, among others.  

Logistics Management (LM): How do you view the current state of the freight economy?

Jason Seidl: Looking at trucking, this is the longest downturn I have seen in my nearly three-decade career. A typical downturn can last anywhere from as quick as six months to as long as 18 months. The downturn really started in July 2022, so we're overdue for a rebound here. I think you look at the industrial data that's out there, it's been pretty meaningful for the last two years. Some of the more recent readings, I think, at least, are heading in the right direction. And that's something that we're tracking through our individual quarterly surveys that we put out for a macroeconomic, as well as a trucking perspective. I think the most interesting thing that I saw with our last set of surveys that we produced was that the private carriers and the railroad shippers were pretty much saying the exact same thing in the economy. If you look at their expectations for their own businesses, growth sequentially, ticked up between 50 and 80 basis points, depending on the survey you viewed. If you looked at their confidence in the overall economy, well, that hops around, with some readings jumping from 20%-to-30% of respondents having confidence in the economy heading up to around 60%, which gives me at least a little bit of hope early into the year.

LM: How do you view the impact of tariffs on North American trade activity?

Seidl: It is definitely interesting. It raises the question of how quickly an organization can make changes to its supply chain, with the answer being not quickly at all. Costs will have to be passed through to customers to a certain amount, and I think that is going to have a near-term impact. One of the things that we did see from recent survey was the amount of people pulling forward freight, with more 25% of the shippers saying that they had pulled forward freight. They didn't pull forward a lot, roughly 70% of those are responding said it was somewhere between zero and 10% [of their freight levels]. But we have seen some of that. So, there is a staging, I think, ahead of time in anticipation of some of these tariffs.

LM: How do you think the 2024 Peak Season went, relative to recent years, which were clearly impacted by the pandemic?

Seidl: While a lot of containerized cargo came into places like the Port of Los Angeles, I don’t think a lot of that transferred to over-the-road freight, as I think carriers would have liked. It was not great but it is not like there was no activity, which is how it felt in 2023. There were also some challenges in the fourth quarter, too, with people taking time off, with some working days being carved out—as well as fewer days between Thanksgiving and Christmas, too, and that presents a challenge, too.

LM: What are your thoughts about the ongoing emergence of AI within logistics and also where it may be headed?

Seidl: When you look at AI and other technologies, it is clear that it is going to potentially help to mitigate costs for certain [logistics] tasks in the future, like labor and insurance, for example. AI within automation is going to be a big deal as well, which was a big bone of contention in the ILA-USMX talks.

LM: Amid all of the talk about tariffs, there has also been a lot of talk and activity related to nearshoring and sourcing. How do you view that these days?

Seidl: It is a real thing and is just something that takes time. There's been a lot of money invested across the supply chain by shippers and carriers alike into Mexico and back in the United States. And I think that that's going to be a good thing in the long run. As we move forward, we're going to see further investments into cross-border logistics into Mexico, and back into the potential inot reshoring some businesses in the U.S., too. Which has also increased carrier confidence in these efforts.

LM: There has been a fair amount of M&A activity within logistics and freight transportation for a while now. How do you see the M&A landscape?

Seidl: There is going to be some action in 2025, whether deals come in the form of one big acquisition or smaller ones focusing more on organic growth.

LM: The Federal Reserve made a few rate cuts in 2024. What is the impact of these cuts on the markets we cover?

Seidl: One thing it can do is spur [growth in] the housing market. The old adage is that a new house accounts for seven truckloads of freight. That could really help, should interest rates continue to head down.

LM: Shifting to LTL, we were recently talking about the concept of LTL consolidation over to truckload, which saw a lot of freight switch over. Does that freight eventually return to the truckload side?

Seidl: It is one of those things that is two-fold. Shippers did it, because the price differential came down enough where they said they could move some of their freight over, with the truckload carrier taking the LTL consolidated freight and move that, even though it has a different freight profile than what they normally move with one-way truckload—and it is working for them. But if prices go up as carriers are expecting, that changes the [trade-off] in the shipper’s mind, in terms of pricing, and I think it also changes the opportunity set for those drivers, because if you look at those freight profiles, they are vastly different between LTL freight and one-way truckload, with truckload, for the most part, being a lot easier than scheduled delivery which is moving freight all the time. I think what you will see is that if we do get a pickup in business, going forward, and there is more optionality in the spot market for the truckload guys, with some of that freight finding its way back to the LTL network.

LM: When you look at the LTL and truckload markets, how do you sort of view each of them early into the new year, just from a general perspective, based on what we're coming out of in 2024, for each segment?

Seidl: I think there is a little more optimism in the truckload market right now than there is in LTL, and that’s really based on what the markets have been through. For the longest time, we have really been in the doldrums on the pricing side with spot rates having been down considerably. The rates that you are seeing right now, as discussed by some of the public carriers, are up around 2%-to-3% on a contractual basis, with the hope and optimism that as we move through bid season, it improves to somewhere between 3%-to-5%. LTL pricing has been good for years, and I don’t think you are going to get that immediate LTL improvement. I think it is going to be what most carriers deem rational in the near-term.