A freight recession, especially one reaching historic levels, doesn’t materialize overnight.
Many of the lingering issues still affecting the freight market can be traced to the COVID-19 pandemic, when economic activity boosted rates, leading to a surge in new carriers and drivers.
That ultimately led to overcapacity, putting downward pressure on rates.
For nearly four years, truck drivers have suffered through these difficult economic conditions.
In July 2022, government data said trucking employment peaked at more than 1.5 million.
Since then, the industry has been purging itself of excess drivers, but that has done little to spark any freight market recovery.
As we move deeper into 2026, truckers and economists are cautiously optimistic that better times are ahead.
“Small-business truckers have been navigating the worst freight downturn in modern history, and greater market stability and clarity could help support a broader recovery,” OOIDA said in a statement. “OOIDA will continue to monitor developments and update our members accordingly.”
Freight rates
Recent industry reports indicate rising rates across most sectors, with a growing sense that this trend could continue.
David Spencer, vice president of market intelligence at Arrive Logistics, said lowering capacity appears to be more sustained.
“We’ve seen other disruptions the last few years that have not had anywhere near the kind of impact, especially nothing that sustains quite as long as this,” Spencer said. “I think you have to consider other factors on the supply side or capacity side for why we’re not seeing that correction. Average equipment age at these fleets is at or near record levels, depending on which type of trailer you’re speaking about. You’re seeing a need for these carriers to move away from the no-margin environment into an area where they need to start to make some money to reinvest in their business, too.”
Demand through the rest of the first quarter will be a key indicator, Spencer said.
“A lot is dependent on whether or not we see near-term rate relief,” Spencer said. “Speaking specifically about through mid-July, I’m having a hard time coming up with a scenario where rates are not up at least 15% year-over-year during that time frame.”
The market remains tight and at elevated levels, Mazen Danaf, Uber Freight’s principal economist, told Land Line.
“We think this is purely a supply-driven increase,” Danaf said. “We haven’t seen a substantial increase in demand yet. External and internal data sources show that consumer spending has been slowing down. Manufacturing is showing some good signs, but it’s still concentrated in sectors that don’t generate a lot of freight demand. The housing market is also still down.”
The OOIDA Foundation’s analysis aligns with the outlook that recent improvements in the freight market are more of a result of tighter capacity than stronger demand.
Until a demand-led recovery takes shape, the Foundation expects the freight market to remain in a holding pattern.
Regulatory fallout
The enforcement of the Federal Motor Carrier Safety Administration’s non-domiciled CDL rule has also had a ripple effect across the trucking industry.
“Whether it’s the non-domicile or English language proficiency regulations, it’s all contributing to the capacity exiting the market at rates we haven’t seen before,” Danaf said.
According to the OOIDA Foundation’s analysis, there is no evidence that recent rate increases are connected to English-language enforcement.
The Foundation added that truck capacity has been steadily declining since 2023.
There is concern that if rates continue to rise while underlying freight demand remains soft, carriers may begin adding trucks back too quickly.
Volatility is always a possibility with any current or new tariffs.
“It’s not necessarily destructive for demand; it depends on when shippers see that buying opportunity and that can result in some temporary surges in demand,” Danaf said.
‘The only certainty is uncertainty’
President Donald Trump’s heavy-handed use of tariffs has made “uncertainty” a buzzword across the supply chain. Last February, Trump announced a 25% tariff on Canada, China and Mexico related to the flow of fentanyl at the borders. That April, a reciprocal tariff was imposed on nearly every country.
Cross-border trucking experienced wild swings month to month. With tariffs announced, then delayed and revived, businesses struggled to navigate Trump’s economic policy. Numbers began to stabilize in October.
A return to any level of normalcy may have been compromised in February.
The Supreme Court ruled that a large portion of Trump’s tariffs is unlawful. Instead of taking tariffs out of the equation, the court ruling may actually hit the reset button, putting companies back where they were this time last year.
On the same day of the Supreme Court decision, Trump called the ruling “deeply disappointing” and vowed to reinstate tariffs through other mechanisms available to him. He immediately called for a 10% tariff on all countries using Section 122, with a possible 15% tariff on certain countries.
Section 122 tariffs have a 15% cap and are good for no longer than 150 days. In March, Trump used Section 301 to launch trade investigations into 60 countries, including Canada, China, the European Union, India, Japan and Mexico. Those investigations can lead to tariffs with no cap and good for four years, with limitless extensions.
With the threat of tariffs lingering, companies may front-load imports as they did last year, creating a surge in cross-border trucking that quickly dies off. High tariffs can also be inflationary, potentially causing Americans to significantly reduce spending on goods.
In February, the economy unexpectedly lost 92,000 jobs, sending the unemployment rate up to 4.4%. It was a red flag amid other events that could affect the economy, including tariffs and the conflict in Iran.
Many analysts have been anticipating an upcycle later this year after a four-year freight recession. As of press time, it is not clear how or if any of the above factors may impact trucking freight.
“The only certainty is uncertainty,” Port of Long Beach CEO Dr. Noel Hacegaba said about tariffs. “Freight can’t wait – and certainty helps keep it moving.”
While still unclear how tariffs will affect economic conditions going forward, Spencer said a price surge is possible, but doesn’t believe they will be a “volatile mover” in 2026.
Cautiously optimistic
While economists and freight analysts are crunching the numbers, the men and women behind the wheel are feeling the effects, both good and bad. Jamie Hagen, owner of Hell Bent Xpress, said last year was “pretty brutal.”
“I thought ’24 was ugly, but ’25 said ‘Hold my beer,’” Hagen told Land Line.
With 2025 in the rearview mirror, this year has been better for Hagen and thousands of other owner-operators and small-fleet owners. Hagen said 2026 “has been pretty good so far.” He is starting to see rates that “made sense for the cost of doing business.”
What’s driving up those rates? Hagen believes that tightening capacity as a result of the federal government’s efforts to clean up trucking is a big factor. In the last few years, customers would turn down offers knowing they could find cheaper freight. With fewer drivers on the road, Hagen is able to set a higher price.
However, skyrocketing fuel prices caused by the Middle East conflict have eaten a lot of Hagen’s higher profit margin. Once diesel goes back down, Hagen is cautiously optimistic about the rest of the year.
“I’m optimistic that things are going to turn around with the way the regulatory situation was looking,” Hagen said. “This administration definitely seems interested in actually enforcing the rules. I feel like there’s going to be some momentum here, you know what I mean, with them taking out nefarious individuals out of the marketplace. I feel like there’s going to be a little bit of a capacity leaving the market.” LL
This article was featured in the May issue of Land Line Magazine. Click here to find more Land Line Magazine articles.
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