Navigating a Soft Freight Market Amid Tariff Turbulence

In the midst of persistent softness in the freight sector, RXO Inc., a prominent player in asset-light transportation solutions, has demonstrated remarkable resilience. Drew Wilkerson, the company’s chairman and CEO, highlighted this during a recent appearance on CNBC’s Worldwide Exchange, where he discussed RXO’s second-quarter 2025 results. Despite overall demand lingering below 2019 levels, RXO reported significant gains, including a 7% sequential increase in gross profit per shipment—the largest in three years. This metric is crucial, as Wilkerson noted that every dollar increase in gross profit per load translates to over $1 million in annualized EBITDA, bolstering the company’s bottom line even in challenging conditions.

Wilkerson emphasized RXO’s unique positioning, particularly in less-than-truckload (LTL) volumes, which surged 45% year-over-year. This growth occurred against a backdrop of a declining market, underscoring the company’s strategic advantages. Additionally, RXO’s leadership in big and bulky last-mile deliveries—such as appliances—saw a 17% year-over-year uptick, defying broader market downturns. These achievements reflect momentum built on customer relationships and technological integration, allowing RXO to capture share in a fragmented industry.

RXO’s Tech Edge in LTL and Beyond

Central to RXO’s success is its proprietary platform, RXO Connect, which provides customers with enhanced visibility, capacity access, and efficiency in managing LTL shipments. Wilkerson explained that many clients, initially drawn to the platform for truckload services, expand into LTL due to its ability to reduce time spent on claims, lost shipments, and damages. This technology not only offers cost savings but also frees up resources for larger transportation spends, making RXO an indispensable partner. As customers grapple with tariff-related uncertainties, such platforms become vital for agility, enabling faster movement of goods from ports or inventory adjustments.

The freight brokerage segment, RXO’s largest, is adapting to shifting dynamics driven by trade policies. Wilkerson described a varied customer response around “Liberation Day”—a term likely referencing key tariff implementation dates—with some accelerating orders, others pausing, and a few halting entirely. Now, with emerging clarity on tariffs, businesses are formulating strategies, and RXO positions itself as a flexible ally, aiding in rapid distribution or inventory management. This adaptability is echoed in recent financials: RXO reported $1.42 billion in revenue for Q2 2025, a 52.6% jump year-over-year, largely fueled by the Coyote Logistics acquisition, as detailed in an Investing.com article.

Tariff Impacts and Market Forecasts

Broader market trends paint a picture of caution. Posts on X (formerly Twitter) from industry observers like Craig Fuller, founder of FreightWaves, indicate truckload volumes have plummeted 15% since mid-February 2025, attributing this to phase-one trade war effects reminiscent of stagnant growth periods. Another X post from Walter Bloomberg highlighted the World Trade Organization’s drastic cut in its 2025 global merchandise trade growth forecast to -0.2% from an earlier 3% rise, warning of potential 1.5% declines under heightened U.S. reciprocal tariffs. These sentiments align with RXO’s observations of soft demand, yet the company defies the trend through targeted growth.

RXO’s adjusted EBITDA climbed to $38 million in Q2, a 35.7% increase from the prior year, per a report on The Motley Fool. This performance is bolstered by strategic initiatives, including the integration of Coyote Logistics, which has driven synergies and margin improvements. Looking ahead, RXO’s proprietary Curve truckload market forecast, released via BusinessWire, anticipates continued spot and contract rate volatility amid economic breakdowns and nearshoring challenges, as explored in Freight Girlz’s Q2 2025 report.

Innovations Driving Logistics Growth

Technology remains a cornerstone of RXO’s strategy. The company recently launched AI-powered truck check-in technology for warehouses, as announced in an OpenPR release, aiming to streamline operations and reduce inefficiencies. This innovation is part of broader trends in managed transportation services, where the market is projected to grow significantly by 2025, fueled by AI and data-driven insights. RXO’s research resources, available on their official site, provide data from 1,500 logistics professionals on outsourcing trends, emphasizing the balance between human expertise and tech in supply chains.

In the face of tariff chaos—evident in X posts noting plunging Asia-U.S. freight rates due to overcapacity and weak trade—RXO’s last-mile segment grew 17%, contributing to overall momentum. StockTitan reported RXO’s Q3 outlook as strong, with expectations of continued margin gains despite market headwinds. Wilkerson’s insights suggest that while the industry contends with depressed volumes and economic slowdowns, companies like RXO that leverage technology and customer-centric approaches can thrive.

Outlook Amid Uncertainty

The trucking industry’s cyclical nature, detailed in RXO’s market cycle analyses, shows how carrier supply and shipper demand interplay with seasonal and procurement factors. Amid forecasts of potential recessions—X users like Don Adams reference a 60-70% chance by early 2026—RXO’s agility positions it well. The company’s Q2 results, including a non-GAAP adjusted EPS of $0.04 beating estimates, signal underlying strength.

As trade policies evolve, RXO’s focus on visibility and efficiency could set benchmarks. Industry insiders note that while global disruptions mirror historical tariff shocks, as per EndGame Macro’s X analysis of a 49% drop in container bookings, innovative firms are poised for recovery. RXO’s trajectory, blending robust LTL growth with tech advancements, offers a blueprint for navigating 2025’s complexities.