2025 Truckload Roundtable: Navigating overcapacity and economic uncertainty in freight transportation

The truckload sector remains stuck in an extended downturn, defined by soft freight demand and persistent overcapacity. These challenges are compounded by broader economic uncertainty, shifting trade policies, and new tariffs—all of which are dampening expectations for a meaningful recovery before 2026.

Rates remain depressed, and service levels may slip as conditions continue to tighten. Shippers are advised to lock in favorable rates now, strengthen strategic carrier relationships, and remain agile in the face of ongoing market volatility.

To help make sense of these moving parts, we’ve gathered three of the industry’s top freight transportation experts for this year’s Truckload Roundtable:

John Larkin, operating partner, transportation and logistics, Clarendon Capital;

Avery Vise, vice president of trucking, FTR Transportation Intelligence; and

Lee Klaskow, sector head and senior analyst, freight transportation and logistics, Bloomberg Intelligence.

Logistics Management (LM): How would you define the state of the truckload market?

John Larkin: Let’s just say that the current period of supply/demand imbalance has now lasted for about three years—that’s roughly twice as long as normal. The term supply/demand imbalance is purposely used to speak to the combination of mediocre—but not horrible— freight volumes and persistent overcapacity.

I suggest that the extended supply/demand imbalance is a function of low used truck prices, which prevents lenders from calling in their collateral; marginal small fleet costs at 40% to 50% of large fleet total costs; and the need for diesel exhaust fluid to operate class 8 trucks in the U.S. This effectively blocks the industry’s ability to dispose of used trucks in Mexico, South America, Eastern Europe, and Africa.  

The low marginal costs mentioned above can be attributed to low overhead costs; the lack of rent/mortgage payments; recast truck financing deals [reduced or delayed payments]; and deferred maintenance schedules. Essentially, these solo operators or small fleets are running on diesel fuel, macaroni and cheese, and deferred or reduced tractor payments. 

Avery Vise: The best description for the truckload market might be discouraged. Heading into this year, FTR had expected the truckload sector to be in the early stages of a mild, but noticeable recovery by now. The economic uncertainty introduced by a chaotic rollout of tariffs has undermined business and consumer confidence and slowed the long-awaited reduction in interest rates.

A pull-forward of imports and related activity to avoid tariffs did help firm up dry van truckload rates a bit earlier this year, but we don’t expect that acceleration to continue through the year. We currently forecast a sharp drop in seasonally adjusted dry van loadings through the balance of this year.

However, given the resilience of small carrier capacity so far, we’re not projecting any acceleration of capacity loss. If that loss does materialize, the market could tighten substantially in 2026.

Lee Klaskow: In a word—disappointing. A rebound in the truckload markets which many expected to happen this year may have been pushed into 2026 amid uncertainty and the economic fallout spurred by the Trump administration's more-protectionist policies.

This could set truckload carriers up for tepid earnings gains in 2025, while less-than-truckload carriers might have to wait until next year for EPS growth. The truckload market is weighed down by slowly improving depressed rates, as supply continues to be stubbornly slow to exit the market.  

LM: How should shippers approach this market?

Vise: Shippers are probably caught between near-term pressures and longer-term objectives. Depending on how tariffs affect the economy, shippers might find themselves in a position to restrain rate increases and perhaps even achieve rate decreases in some cases. However, many carriers desperately need rate recovery.

Shippers might consider whether fighting rate increases too doggedly might set the stage for a spate of carrier failures if the economy goes south—and that dynamic would lead to a stronger upswing in utilization and rates when freight growth returns. Working with carriers now to help them achieve a better financial footing might be in shippers’ best interest.

Klaskow: While the timing of the cycle has been difficult to predict this go around, what we know for sure is that rates will eventually move higher given the booms and busts of the spot market.

Shippers should focus more on strategic relationships with their capacity providers over just looking to turn the screws on truckers to get the lowest rate. This may give shippers better access to capacity and fairer pricing when the market tightens.

Larkin: Shippers should attempt to lock in low rates now for the longest duration possible, as it’s possible that the bullwhip effect will kick in now that heavily-laden vessels are again headed this way from Asia. Those exposed to the spot market should consider locking in contract rates as increased demand and reduced carrier capacity could become evident later this year.

I would also recommend treating your core carriers and dedicated carriers gently as rate pressure has put many carriers behind the eight ball. Treating those carriers well now could prove worthwhile when supply and demand inevitably tighten—as they’ll be less inclined to offer up outsized rate increases at that time.  

LM: What can shippers expect in terms of service over the course of the next year?

Larkin: Shippers have been more price- than service-sensitive in recent years. However, as the supply/demand gap closes, there’s the risk that service levels could suffer. It may make sense to pay a modest premium today for quality carriers who can maintain service levels when the freight market flips. 

Vise: Service could be a mixed bag. The softening of dry van freight volume that FTR is forecasting theoretically should result in low utilization and carriers eager to please in order to retain the business.

However, as the White House rolls out new tariffs, changes tariff rates, etc., the result could be surges and plunges in volume and even the potential of supply chain disruptions akin to those in 2021. Moreover, a market that is too difficult for carriers could result in lots of capacity exiting the market, and that certainly would be a challenge for service.

LM: Is pricing where it needs to be for truckload rates from both a contract and spot market perspective?

Klaskow: Absolutely not from the carrier perspective, while I’m sure many shippers think they’re just fine where they are. Many higher cost truckers operating in the spot market are making just enough to cover their expenses—and that leaves very little for profits or capital to reinvest in their businesses.

Expectations for contractual truckload rates have moderated as tariffs, persistent slack capacity, and weak freight demand weigh on the ability of carriers to raise prices. We believe that rates, excluding fuel surcharges, will keep inching higher in the second half of this year and could accelerate to mid-single-digit growth by year end. This might yield low- to mid-single-digit rate growth for all of 2025.

Vise: This is always a difficult question because the short answer is that truckload rates are what the market dictates that they be. So, from that perspective, the answer is always yes. However, carriers increasingly are hitting a breaking point as costs continue to rise.

FTR forecasts practically no growth in dry van spot rates through 2026, and as of now we expect dry van contract rates to rise less than 2% annually through 2027. We have taken to calling this a “margin-less recovery” as rates are expected to rise but not by enough to offset inflation.

The reality, though, is that this forecast will not play out this way. If truckload carriers were to see contract growth of less than 2% in both 2025 and 2026, the consequence almost certainly would be a dramatic loss of driver capacity that naturally would lead to firmer rates by 2027 if not before.

Also, truck orders have plunged recently, and they’re unlikely to recover until carriers see stronger rates. So, prolonged weakness will set the stage for another tight market, though that probably would be more than a year away.

Larkin: I’ll just say no. Many carriers are running operating ratios above 100% currently. Heartland Express and Werner, two longtime industry stalwarts, lost money in the first quarter of 2025. Pricing needs to rise a good 10% to 15% higher in order for carriers to earn adequate returns on their equipment investments. 

LM: How do you view the state of driver availability?

Vise: Truckload carriers seem to be able to find enough drivers, but that’s mostly because they don’t really need that many drivers today. In late 2022, payroll employment in truckload was nearly 6.5% higher than it was immediately before the pandemic.

Today, employment is marginally lower than it was in February 2020. We haven’t heard any carriers claim that the issue is lack of drivers. Many carriers surely still have trouble finding drivers that meet their qualification standards, but not to the degree seen in tight markets like 2021.

There are some plausible upside and downside possibilities for changes in the driver supply, however. For example, a sharp drop in freight volume could result in very small carriers—one-truck for-hire operations—failing in larger numbers, thus freeing up more drivers to be hired by larger carriers. Even this far into the freight rate recession, the truck freight market has 89,000—about 35%—more carriers than it did in February 2020. Of course, in a market that leads to such a bloodbath, larger truckload carriers might have little need for those drivers.

One development that arguably could reduce the driver supply is the resumption of inadequate English language skills as an out-of-service violation. FTR’s analysis indicates that the number of drivers driven out of the industry based on roadside enforcement is unlikely to move the needle. However, it’s possible that shippers, brokers, and carriers will be more proactive in order to avoid service failures and potential tort liability.

Larkin: I’ll add that as fleets have downsized, driver availability has been solid. Companies are spending much less money in 2025 on driver recruiting and retention. As freight demand growth accelerates, that situation could change quickly. At that point, carriers will need to further increase driver pay and pass along those pay increases to their customers.

LM: What will the truckload market look like five years from now?

Larkin: Five years from now, we’ll see more autonomous trucks, more alternative fuel trucks, more electric trucks, and more network optimization tools which will help fleets maximize their equipment productivity. But we’ll still see an industry that’s inexorably tied to the freight market cycle. There appears to be no way to insulate oneself from the ups and downs of the freight economy.  

Klaskow: It’s hard to know where we will be in the trucking cycle five years from now, let alone next week. But I would guess that the market will be more in equilibrium then it is today. There is so much uncertainty out there.

Whether we’re talking about rates, demand or what the regulatory backdrop will look like. There remains some uncertainty about what the previous announced EPA engine mandates will look like under the Trump administration. Mandates could add around $25,000 to the price of a new truck if the rules stand as they are—and that could be cut in half without the warranty.

Vise: Although we can envision a scenario that leads to the failure of large numbers of very small carriers, their survival to this point raises the question of whether a shift in capacity from asset-based carriers to intermediaries might be a longstanding situation and might even grow over time. Moreover, some of those intermediaries are units of truckload carriers.

It’s possible that the distinctions between carriers and brokers will become even fuzzier than they sometimes are today. We could see a bifurcation of the two functions we have traditionally seen as integrated within truckload carriers—the booking and dispatch of freight on the one hand and the operation of trucks and trailers on the other.

The operations side would not be just owner-operators as we think of them, though. The market already has sizeable operations that manage drivers and equipment and lease that capacity to other carriers. This paradigm still won’t be the norm within five years, but it could be much more prevalent than it is today.

LM: How do you view the impact of the trade war and related tariff actions on truckload shippers, and how do you think it could impact the 2025 peak season?

Klaskow: The animal spirits created after the presidential election appear to have given way to increased pessimism about the impact tariffs could have on inflation and economic activity in the U.S. The probability of a recession increased to 40% at the end of April, according to consensus, after reaching a low of 20% in late December. 

Another surge in pull-forward demand is around the corner after the May 12 announcement that the U.S. and China de-escalated duties. This could create a capacity crunch across all modes of transportation as back-to-school and peak-season demand converge. Supply chains will be more resilient than the congestion levels seen during the pandemic.

Vise: Although the weakness we anticipate might make for an even more fluid market for shippers’ traffic managers, the near-term economic impact of tariffs as they have been executed probably negates those benefits as far as shippers’ overall businesses are concerned.

Certainly, there are exceptions, but in general even in situations where U.S. shippers have seen stronger demand because of tariffs on foreign competitors, they’re also facing increased costs due to tariffs. Our issue isn’t the concept of using tariffs to promote domestic production, but rather the scattershot and aggressive approach that creates a shock to the economy and introduces great uncertainty as businesses and consumers don’t know where the endgame is heading.

A more systematic approach with opportunity for stakeholder input—the approach that traditionally has been used in the past—almost certainly would have resulted in a more effective outcome and would have greatly reduced anxiety. As for the peak season, the uncertainty for both the supply chain and consumers probably ensures a softer-than-typical year. One upside would be completion of a major tax bill, but that would depend on the specifics of the legislation and how generous consumers perceive it to be.

Larkin: The tariff seesaw has created a lot of angst for shippers, carriers, 3PLs, suppliers, everyone involved in the supply chain. However, as tariff deals are finalized with more and more of our trading partners, as the ‘Big Beautiful Bill’ is signed into law, the Fed ratchets rates down, and regulations are loosened—supply and demand should tighten. As uncertainty around the tariffs diminishes, the trucking environment should improve and the 2025 peak season could be robust.  

LM: Given the up-and-down nature of the economy and the market, can you offer up some words of advice to shippers?

Vise: The complete lack of predictability—consider, for example, that President Trump announced a 50% tariff on imports from the European Union on May 23 and then postponed them two days later—is, in a perverse way, liberating. Shippers could wait until everything shakes out, but that could take many months. Instead, they should consider drafting multiple strategies so that they can pivot if situations change.

The trick, of course, is knowing when to pull the trigger on one approach or another. Most of all, shippers probably should hedge their bets. They understandably want to pull ahead some inventory to avoid tariff increases, but they need to be wary of overdoing it and risking obsolescence. The situation is like that in the pandemic, but with one huge difference. In 2021, demand wasn’t in question due to stimulus and other factors. That’s not the situation today for most shippers.

Larkin: Treat your carriers fairly as they have families to feed, too. Begin to wind down your exposure to the spot market before it spikes later in 2025 or early in 2026. Consider building some buffer inventories to guard against any further uncertainty that may creep into the freight market landscape. Last, take a long-term view, develop alternative scenario plans, all while remaining nimble.

Klaskow: Supply chains and logistics are not for the faint of heart. They are fluid and unpredictable. Build optionality into your plans so you can be nimbler to change. Also, as I mentioned before, build strategic relationships with your capacity providers to be better positioned when markets are tighter. And most importantly, take a deep breath.