Navigating Uncertainty: The 2026 Outlook for North American Freight
The freight and logistics industry gathered in Chicago for the Journal of Commerce Inland Distribution Conference 2025 to dissect the turbulent economic landscape and chart a path forward. A key session focused on the North American economic and freight market outlook, featuring crucial analysis from Paul Bingham, Director of Transportation Consulting in the Global Insight Unit of S&P Global Market Intelligence.
During a discussion following his session, Paul detailed the major demand factors driving the freight industry, emphasizing that freight transport is a derived demand—meaning its strength is fundamentally tied to the health of the broader economy.
Slow Growth and Stimulus Measures
According to the analysis shared by S&P Global Market Intelligence, the U.S. economy is currently running below its potential. While forecasters are “still not predicting a recession,” the economy is growing more slowly than previously projected. This slowdown, marked by creeping unemployment, has prompted the Federal Reserve Board to begin lowering interest rates as a stimulative measure.
However, businesses still face headwinds. High capital costs due to elevated interest rates are combined with “the enormous uncertainty around trade policy where your supply chain is not at all stable in terms of your costs,” Paul explained.
The Lagging Effect of Tariffs and Peak Inflation
A central focus of the economic outlook was the impact of trade policy and tariffs on inflation. Despite some critics suggesting inflation signs were absent, Paul reaffirmed that structural inflation resulting from tariffs happens with a lag. Manufacturers overseas cannot absorb the full cost of tariffs indefinitely, and those costs must eventually pass through inventory, wholesalers, and retailers.
Sam, who led the discussion, noted that certain inflation data still showed rates closer to 3%. Paul confirmed this pressure, forecasting that inflation is expected to peak in the fourth quarter of 2025 at 3.8%.
However, this peak is anticipated to be temporary. Paul noted that as the market adjusts to the new, higher prices resulting from tariffs, inflation should trend downward through 2026, eventually returning closer to the Federal Reserve’s 2% target rate by 2027.
Building a Better 2026 Freight Market
The outlook for 2026 is one of cautious optimism. The anticipation is that easing monetary policy and subsequent lower interest rates will help unfreeze sectors like housing, where homeowners currently hesitate to sell due to facing higher mortgage rates if they move. Lower capital costs and increased stability regarding tariff policy could also allow postponed business activity and capital investment to proceed, driving industrial freight and manufacturing production.
Sam highlighted a point made by Paul's conference counterparts: even moderate improvements in the economy at this point could have a significant impact on our freight market.
On the supply side, capacity continues to tighten. Moves by the US DOT to remove questionable actors from the driver workforce, combined with capacity reduction stemming from carrier shutdowns, contribute to a closing gap between supply and demand. This combination of moderate demand growth and tighter capacity is essential for rate recovery.
Paul summarized the collective analysis: “We’re saying guarded that there could be some strong enough growth that we start to exit this freight recession we’ve been in for 3 years in 2026.”.
As the industry looks ahead, Paul voiced a shared sentiment for those in the supply chain: “I’m really hoping in 2026 we don’t have the same level of disruptions and uncertainties from policy and other reasons that we’ve had for the last few years”. Stability is key for planners and managers seeking to return to normal operations.