A freight recession stretching back to 2022 has kept the trucking industry under prolonged pressure, forcing carriers to navigate weak volumes as they look to late-2025 trends for evidence that the downturn is easing.
Last year, trucking activity by tonnage moved rose just 0.1 percent over the 2024 average, according to the American Trucking Associations’ seasonally adjusted For-Hire Truck Tonnage Index. The paltry increase represents the first annual gain for the index since 2022, and was pushed forward by a month-over-month increase of 0.4 percent in December.
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The current freight market going into 2026 “feels fragile,” said Shelley Simpson, CEO and president of trucking and logistics services provider J.B. Hunt, during a January earnings call.
Simpson’s description of the market comes amid a continued exodus of trucking capacity and mixed demand signals, with the CEO calling out a lack of elasticity in the current supply. The inelasticity makes the market prone to volatility in rates and service levels in the event of a demand shift or disruption.
“Even small tightening is creating bigger ripples in the market than what it has historically,” Simpson said.
The trucking industry has dealt with excess capacity since freight demand escalated during the boom period of the Covid-19 pandemic, resulting in far more trucks and drivers than loads moved. Estimates from the Federal Motor Carrier Safety Administration indicate that the number of new motor carrier certificates approved increased 59 percent from 2019 to 2021, to 79,185 approvals.
While this created a glut of smaller carriers, the capacity itch trickled down to major trucking firms who are still grappling with the overflow.
Adam Satterfield, executive vice president and chief financial officer of Old Dominion Freight Line, said in October that the less-than-truckload (LTL) provider was “definitely north of our target” to have 20-to-25 percent excess capacity.
“I’d say we’re well north of 30 percent at this point and probably even above a 35 percent type of range,” Satterfield said.
The cautious tone from both Satterfield and Simpson reflects an industry that has struggled with volume declines amid the three-year dip in freight demand, coinciding with sustained contraction in the U.S. manufacturing economy and higher operating costs. Trade headwinds that resulted in fewer goods entering the U.S. in 2025 further exacerbated the issue for trucking companies.
“We’ve had some false starts,” Simpson said. “We want to finish up at least January and February and see what happens from there.”
Capacity cuts and winter weather buoy rates
To close out the year, the wider U.S. freight market felt the impact of winter storms, but freight rates in the industry’s truckload market have seen recent improvement amid the tightened capacity.
According to the December Cass Freight Index, shipments fell 7.5 percent compared to the 2024 month, and have declined 13.5 percent on a two-year basis.
On the bright side, the Cass Truckload Linehaul Index increasing 1 percent month over month in December. On an annual basis, the rates calculated by the index have increased 2.1 percent.
“An active winter is freezing out some freight capacity, supporting the strongest run of spot rates in four years in the four weeks through mid-January,” said Tim Denoyer, vice president and senior analyst at ACT Research and writer of the monthly Cass Transportation Index Report. “The retrenchment has begun in the dry van market, but reefer spot markets remain particularly tight in January.”
For 2026, truckload players hope to build on a 2025 that ushered in better rates. The Cass Truckload Linehaul Index calculated a 1.8 percent increase across rates last year, turning positive after a 10 percent decline in 2023 and another 3.4 percent dip in 2024.
Monthly average spot market rates to move van and reefer freight reached their highest levels of the year in December, according to another benchmark from DAT Freight & Analytics. Spot van rates increased 20 cents from November to $2.29 per mile, while rates for refrigerated freight rose 15 cents to $2.69 per mile.
Ken Adamo, DAT’s chief of analytics, noted that stronger freight volumes were not the catalysts for the higher prices, attributing the figures to the weather and constrained capacity.
“Heading into Q1 2026, normal financial pressures will trim capacity and pinch freight broker margins, and if tariffs are overturned, we could see a chaotic couple of quarters as imports surge,” said Adamo. “But the longer this flat market continues, the more we’ll need something big and sustained to invert it.”
2026 “still lacks a demand-sized spark”
To kick off 2026, both trucking indices from TD Cowen and AFS Logistics—representing rate per mile for truckload freight and rate per pound for LTL freight—project a moderation in activity from fourth quarter levels. On an annual basis, both indices show modest improvement over the 2025 first quarter.
The TD Cowen/AFS Truckload Freight Index is projected to ease to 7.4 percent this quarter, from 7.6 percent in the prior quarter, while the TD Cowen/AFS LTL Freight Index is forecast to moderate to 66.1 percent from 67.9 percent in Q4:2025
“The common sentiment around the industry is that carriers who have weathered the rock-bottom rates of the past three years will be rewarded with a recovery in 2026. There are some reasons to believe, with rejection rates rising above 10 percent in December and spot market rates inching up closer to contract rates,” says Aaron LaGanke, vice president of freight services at AFS Logistics. “But when exactly that shift will occur is anyone’s guess. Plenty of voices expected a turnaround by mid-2025 that didn’t materialize, and today’s landscape still lacks a demand-side spark to ignite a full recovery.”
English-language crackdown could accelerate capacity crunch
U.S. government policy has played a role in the employment side of the trucking market that could ultimately set a tone for both capacity and rates in 2026.
A nationwide crackdown on trucking compliance by the Trump administration has already placed 9,500 truck drivers out of service for not meeting English-language proficiency requirements.
Tied in largely with the administration’s hardline immigration policies, the Department of Transportation (DOT) has prioritized the enforcement of English-language proficiency for truckers alongside stricter standards for schools offering commercial drivers’ licenses (CDLs) to non-domiciled immigrants.
The DOT has called on several states to revoke thousands of non-domiciled CDLs that either were illegally issued or have expired.
In a December analyst conference, Simpson said she was expecting up to 400,000 drivers to be impacted by the national enforcement crackdown on CDLs and English proficiency over the next two years.
That would amount to just under 11 percent of the nearly 3.8 million total truck drivers in the U.S., according to 2024 employment data from the Bureau of Labor Statistics.
Werner Enterprises chairman and CEO Derek Leathers applauded the DOT’s enforcement policy in a December analyst call, noting that he thought many CDL schools exploited a prior lack of enforcement against substandard driver training programs.
“We think that is a critical safety issue and one that needs to continue to be enforced,” said Leathers. “If 20 percent of the schools in this country are operating outside of federal guidelines and they’re able to be shut down or guidelines enforced, that will have a huge dampening effect on people entering the industry, which is a positive. We shouldn’t allow somebody to go to a CDL school for three days and think that they’re qualified.”
Leathers observed the policy shifts would make a “meaningful” impact on supply in over-the-road trucking and truckload cargo-carrying businesses.
