The two biggest questions asked of any economic recession are, “How bad will it get?” and “How long will it last?”
Those questions are asked of freight recessions, too. Unfortunately, the answers are often as varied as the “experts” that provide them. The current doldrums in the freight market were predicted to ease up towards the end of 2024. Or, maybe in the second quarter of 2025, which somehow became the second half. Or, was it the first half of 2026? In the meantime, trucking costs continue rising while freight rates remain stagnant.
The “good” news is that truck sales are slowing, removing excess capacity from the market. Capacity is the “supply” in the freight-hauling supply and demand equation. When there are too many available trucks for the amount of freight offered, rates fall. When there aren’t enough trucks, competition to get loads hauled pushes rates upward. There is, however, a cause and effect. When rates rise, truckers make money. They spend some of that money buying more trucks, expanding the fleet to make more money while the earning is good. Eventually, the number of trucks becomes too large for the available freight, and the cycle begins anew.
On rare occasions, the cycle gets stuck. Everyone knows a change is coming, but day after day, rates don’t budge.
In the current situation, there were contributing factors. EPA regulations that required fewer emissions and improved fuel economy for heavy-duty trucks pushed carriers to purchase more trucks to avoid expected price increases and potential maintenance issues. Then tariffs, both threatened and enacted, roiled the freight market as consumers rushed to make purchases before costs rose. Then, under a new administration, tariffs and threats of more tariffs impacted consumer spending. Freight levels, and rates, temporarily rose as consumers spent to beat new tariffs. Then they fell. Freight rates, thought to be at the bottom, went lower yet. Truck numbers remained high.
As in prior months, August showed a mixed bag of results. Tim Denoyer, ACT Research’s (actresearch.net) vice president and senior analyst, said in a recent release, “Extra pre-tariff equipment purchases and ongoing volume softness have kept truckload market conditions from tightening this year, and most of the adverse effects of tariffs are still to come.” He concluded, “Class 8 tractor production will drop by more than 30% from 1H to 2H this year, and this reversal will eventually support a recovery in for-hire demand.”
The American Trucking Associations (ATA) reported a gain in freight volumes for August of 0.9% after gaining 1.1% in July.
“The good news is that truck freight volumes had a nice end of the summer,” said ATA Chief Economist Bob Costello. “However, while I’d like to predict a strong rebound in freight levels through the upcoming holidays, I can’t. I believe traditional seasonal patterns are off this year as shippers adjust to tariffs.”
ATA (trucking.org) freight numbers are compiled from data submitted by its members and represents a heavy percentage of contract freight movement.
The Cass Freight Index (cassinfo.com) for Shipments is comprised from billing information from Cass customers and contains information from trucking, pipeline, rail, ship, air and other modes of transport, with about three-quarters from truckload and less-than-truckload trucking. The Index for August came in 1.5% lower than July and 9.3% lower than August 2024. The Index for Expenditures also fell, 2.8% from July and 0.4% from August 2024. Considering the inflationary pressure of the past year, it’s that shipping expenditures fell at all, even if they didn’t fall as far as shipment numbers did.
In fact, Cass Inferred Freight Rates, an Index calculated using shipment numbers and expenditures, showed a 9.8% increase in August compared with August of last year.
ACT’s Tim Denoyer, writing for the Cass Index, noted, “The long freight downturn persists, though we note that truckload freight is up in the Cass data while LTL has declined significantly.” Denoyer also commented that intermodal volumes were running ahead of last year’s level, likely due to consumer pre-tariff spending. The Cass data contains North American domestic freight only, so more consumer cash being spent on imports would not impact the Cass report.
A recent seminar conducted by FTR Transportation Intelligence (ftrintel.com) hosted a segment featuring Paul Rosa, Senior VP of Procurement and Fleet Strategy at Penske Truck Leasing. Penske is involved in several areas of the freight market, including truck rental, long-term leasing and logistics. The company is exposed to numerous facets of the market.
Rosa is optimistic about the coming freight market, claiming that fleets are experiencing pent-up demand for growth but are awaiting some movement in freight volumes and rates before investing in more equipment. He said that telematics data and rental utilization figures are early signals that recovery is coming. When recovery happens, it may happen quickly, as it often does. While Rosa’s outlook may be positive, the costs of acquiring new equipment and the danger of being stuck with rolling stock that isn’t earning revenue is very real to carriers.
One plus for both freight markets and truck buyers didn’t happen in August, but took place on September 17 as the Federal Reserve Board cut its key interest rate by a quarter-point, projecting two more rate cuts yet this year. The FED had held their rate unchanged all year, citing unknown effects of Trump tariffs and reduced workforce due to immigration enforcement. Inflation has remained higher than expected as unemployment had begun rising, an indication that consumers were not buying more products, but simply paying more for the ones they bought.
It is hoped that lower interest rates will stimulate spending as costs for mortgages, car and truck loans and business borrowing are reduced. On the down side, however, is that lower interest costs could stimulate both new and used truck buying, adding more capacity to a market that is already suffering from too many trucks.
What happens for the rest of 2025 remains a topic of discussion, with most economist predicting slow improvement in the market
Cliff Abbott is an experienced commercial vehicle driver and owner-operator who still holds a CDL in his home state of Alabama. In nearly 40 years in trucking, he’s been an instructor and trainer and has managed safety and recruiting operations for several carriers. Having never lost his love of the road, Cliff has written a book and hundreds of songs and has been writing for The Trucker for more than a decade.
