Truckload 2025: How carriers are navigating a three-year freight slump

The $387 billion U.S. full truckload (TL) sector has been stuck in neutral for roughly three years, and recovery remains slow.

Truckload carriers are cautiously adding capacity, though only in small increments, one of the few bright spots as the sector works to climb out of a prolonged freight recession caused by excess capacity and soft demand. Spot rates have even fallen below $2 per mile since spring 2022.

Freight demand has been declining for months and is expected to continue slipping due to President Donald Trump’s tariffs and other economic factors, according to several experts. A 1% increase in tariffs could reduce truckload demand by 0.15% or more, while a 10% hike might cut demand by 2%. Tariffs in the 18% to 28% range could potentially depress demand by 4% to 6%, according to the latest Uber Freight market update.

Jonathan Starks, CEO of freight forecasting firm FTR, put it bluntly: “Transportation has been exceptionally impacted and will continue to remain in flux until at least the end of the year.”

First-quarter freight volumes hit the lowest level of any calendar year. While this may benefit transactional shippers seeking to save a few cents per mile, it is hardly welcome news for the tens of thousands of dry van operators navigating nearly three years of freight recession.

The mantra inside the industry is simple: “Make your money when you can.” This explains why J.B. Hunt, the nation’s largest TL carrier, began peak-season surcharges earlier this year—largely in response to global trade complexities and the front-loading of freight in a bid to “beat” anticipated tariff increases.

For Logistics Management’s annual deep dive into the truckload sector, we aim to answer three key questions: How is the overall economy challenging even the largest, best-run carriers? How are carriers adapting and adjusting business models to meet that reality? And what does the future hold for TL shippers regarding rates and capacity?

Operational challenges

Still, today, the biggest carriers in the TL sector barely have a 1% market share. That’s because of the relatively low barriers to entry stemming from the fact TL carriers don’t operate real estate intensive terminal networks. Rather, they run straight from Point A to B, with the lowest-cost operators tending to win out.

In the non-union TL sector, the ongoing struggle to hire and retain qualified drivers is a longstanding topic—and it has ramifications on capacity, rates, and overall operational efficiency.

Even for the biggest players. For example, Knight-Swift Transportation Holdings, parent of the second-largest TL carrier, posted second-quarter consolidated operating income of $72.6 million in the second quarter, a 14.4% percent year-over-year increase.

Knight’s truckload segment made the most gains in that metric for the quarter. It’s newly formed less-than-truckload (LTL) segment saw a substantial drop compared to the second quarter of 2024. The company’s intermodal business also had an operating loss worsen.

“Overall, most segments experienced pressure on revenue year over year with a soft freight environment,” said Knight CFO Andrew Hess on an earnings call

According to Knight CEO Adam Miller, U.S. tariff policy spurred volatile freight flows, requiring agility from Knight-Swift businesses. The “import cliff that many anticipated” to attempt to beat President Trump’s tariffs was limited. Still, there was a general softness in freight demand for most of the second quarter, especially on the West Coast, he said.

“Given this backdrop, we’re pleased that our truckload business was able to prevent a deeper decline in revenues while growing margins and operating income meaningfully year-over-year,” added Miller.

Other TL carriers haven’t been as fortunate. Heartland Express, the nation’s 13^th-largest TL carrier, saw a 23% drop in operating revenue to $210 million in the second quarter. Heartland reported a second-quarter operating ratio (OR) of 106—signaling a tough quarter.

P.A.M. Transport, another large TL carrier, reported its trucking division had a 112.5 OR in the second quarter. Covenant Logistics Group also reported flatter revenue for its combined TL segments of expedited and dedicated in the second quarter.

“We believe that general freight market fundamentals are slowly improving, although progress is uneven,” said Covenant CEO and chairman David Parker, adding that clearer trade policies coming out of Washington in the future could spur demand.

The financial environment in the TL sector is so uncertain that Landstar, the nation’s 5^th-largest carrier, declined to give analysts much financial guidance entering the third quarter because of uncertainty. Landstar automotive segment saw the largest decline (down 17%), except to note that management expects a sluggish financial environment due to tariff impacts and interest rate sensitivity.

TL carriers specializing in housing and building products continue to feel the financial pressure from higher rates as well.

Rail mergers and bankruptcies

A proposed $85 billion rail merger between the Union Pacific and Norfolk Southern (UP/NS)—which would create the nation’s first east-west, transcontinental rail operation—does not appear to bode well for the TL sector either.

An analysis by T.D. Cowen finds the merger could cost the trucking industry as much as $1 billion in new freight going to the rail industry. Conversion of trucked volumes in the U.S. underpins a part of UP’s proposed transcontinental merger—that would mostly be shorter-haul transport moves occurring around the Mississippi River that are predominantly handled now by trucks.

Since at least the turn of this century, reliable intermodal domestic transport—usually trailers or containers on flatcars—has become one of the most profitable and successful niches within the TL industry.

Such intermodalism has also taken some of the pressure off the perennial hunt for qualified drivers. That’s because it makes economic sense to send most long-haul TL traffic (those over 1,200 miles) on the rail. That allows truckers to concentrate their drivers in short- and medium-length of haul routes.

The UP/NS proposal could spur the Burlington Northern Santa Fe, a major western railroad, to make an offer for the smaller CSX rail line, a mostly East Coast rail network. Needless to say, there are many moving parts to any rail merger.

But the message is clear. “If you stand still,” said UP CEO Jim Vena this summer on an earnings call, “you get left behind.”

That’s already happened to some TL carriers. Slackening demand for dry van truckload freight is already taking its toll with various bankruptcies and cessations around the country. For example:

• Madison, Ill.-based LTI Trucking—with about 250 drivers, 300 tractors, and 575 trailers—shut down operations on April 2, but did not file for bankruptcy protection. The company, which did not state a reason for closing, was a major shipper of products for AB InBev, KraftHeinz, Vlasic, Hershey's, Nestle, Tyson, Hillshire Farm, Kroger, Hostess and Sara Lee.
• Florida-based regional trucking company Davis Express—which had 160 trucks and 140 drivers—shut down permanently in April. Davis Express also did not file for bankruptcy.
• Carroll Fulmer, a 70-year-old Florida-based carrier with 400 trucks and 1,700 trailers, closed last summer. Carroll had more than 600 employees.
• TGS Transportation, a 40-year-old Fresno, Calif.-based carrier with 150 trucks, closed this fall. That followed the closure this summer of GSC Enterprises, another mid-sized carrier based in California.
• It’s not just big and medium-sized carriers taking the hit. On the other side of the trucking spectrum, Bloomingdale, Ill.-based Integral Express, with three trucks and three drivers, filed for Chapter 11 bankruptcy protection on June 15 in the U.S. Bankruptcy Court for the Northern District of Illinois.
• Dolche Truckload filed for bankruptcy to reorganize its business. The Palatine, Ill., women-owned and founded trucking company listed $1 million to $10 million in assets and liabilities in its bankruptcy petition. It says it’s still operating.
• Illinois transportation firm Nortia Logistics—which allegedly defaulted on repaying Union Pacific Railroad for $3.6 million in freight services—filed for Chapter 11 bankruptcy on June 9. The company had 56 power units and 45 drivers and was leasing 26 trucks from Penske Truck Leasing.

The future is now

Truckload executives at savvy companies are trying different revenue streams to build volume while the overall, dry-van truckload market recovers from its three-year doldrums.

One idea catching fire is building long-lasting relationships with logistics companies and shippers on both sides of our borders with Mexico and Canada. As the near-shoring of manufacturing sites marry with distribution centers and logistics hubs, truckloads are going to be needed.

Werner Enterprises CEO Derek Leathers is confident these rising foreign direct investment trends in Mexico could eventually translate into greater demand for cross-border TL services. In fact, foreign investment into Mexico is rapidly increasing: Mexico saw over $55 billion invested in the first half this year, a record, according to data from the government of Mexico.

“What I like more about it is where the inflows are coming from,” said Leathers at a Deutsche Bank 2025 Transportation Conference in August. Over $25 billion of the foreign direct investment in Mexico—or nearly half the $55 billion invested in the first six months of this year—came from the U.S. and Canada, according to government data.

Shippers seeking to better understand the complexities and ebbs and flows of TL freight should know where the truckload market may be shifting long-term. Shippers need to balance their operational challenges to exceed service expectations.

Rate increases will be difficult to maintain, analysts say. Any increase in TL earnings likely will come from internal efficiencies, not rate hikes to shippers. The year 2026 promises more of the same.