There are few reasons for trucking companies to order new iron, with still-sluggish freight growth and depressed rates.
But the U.S. spot market is solidifying and showing signs of a possible recovery, truckstop.com reports. Shippers saw conditions improve slightly in October, while U.S. freight volumes were down in October, according to the Bureau of Transportation Statistics.
New tractor demand continues to face headwinds
Demand for new Class 8 trucks remains muted for myriad reasons, not least of which is still-sluggish freight growth and lingering overcapacity. ACT Research reports in its latest North American Commercial Vehicle Outlook that a pre-buy ahead of EPA27 emissions rules is unlikely to materialize, and if it does, it won’t be until late next year.
“Recent clarity regarding EPA27 is welcomed, but as we have reiterated, truckers buy trucks when they make money. While regulatory clarity is helpful, at current low levels of carrier profitability and returns on investment, barring an unforeseen shift in economic fortunes, a tractor pre-buy is highly unlikely but could spur some marginal activity later in 2026, as supply-demand conditions for carriers improve,” said Ken Vieth, ACT’s president and senior analyst.
“Additionally, the trucking industry is contending with recently enacted §232 tariffs that placed a 25% levy on the value of foreign content in imported medium- and heavy-duty trucks and buses. With the for-hire market entering a third consecutive year of generationally low profitability, and freight rates generally moving sideways, tariff-driven equipment cost increases will help to constrain already weak new US vehicle demand.”
Those challenges are combined with others, including:
- Freight rates and for-hire carrier profits that remain mired at recessionary levels;
- A freight air-pocket happening now that follows an extended tariff-avoiding freight pull-forward;
- Corrosive tariff-driven goods inflation that will weigh on freight volumes;
- A pullback by private fleets after significant fleet expansion in 2023-2024;
- And macro-level uncertainty around U.S. economic policy.
Freight Transportation Services Index (TSI) fell 1.2% in October
The Bureau of Transportation Statistics (BTS) reported its TSI fell 1.2% in October from September levels, marking the second consecutive month of declines. It was also down 1.2% year over year.
The freight TSI measures the amount of freight carried by the for-hire transportation industry.
“The Freight TSI decreased in October due to decreases in rail carloads, rail intermodal, pipeline, and trucking while air freight and water volumes increased,” BTS reported.
Shipper conditions improved in October
FTR’s Shippers Conditions Index (SCI) got a slight bump to 0.3 in October, from September’s reading of -0.5. Higher freight rates offset improving conditions in other areas for shippers.
FTR anticipates the index will remain basically neutral through mid-2026.
“Although we still lack comprehensive insights into the state of the U.S. economy, a recent Federal Reserve revision of industrial production estimates implies that freight demand is even weaker than we thought,” said Avery Vise, FTR’s vice president, trucking.
“That’s good news for shippers in the near term as it suggests that freight capacity might still exceed volume significantly, but it raises the prospect of a faster and stronger market tightening when freight demand does recover. We believe the freight market has entered an inevitable transition phase that could yield volatility in the coming months.”
Spot market continues to improve
Meanwhile, the U.S. spot market continues to flash positive signs for truckers. The week ended Dec. 5 showed “a remarkable surge in broker-posted spot rates and may indicate an inflection point,” reported truckstop.com. “If the pattern holds over the next week or two, a recovery could be well underway.”
Rates were up across all equipment types, especially reefer. The gains exceeded seasonal expectations.
Refrigerated rates jumped the highest since the week of International Roadcheck in May, and reached their highest mark since January 2023. Dry van rates saw their best week-over-week increase since mid-year.
Flatbed rates enjoyed their biggest gain since April and reached their highest level in six weeks.
“We warn that spot rate volatility often occurs around major holidays and does not necessarily signal a change in trend,” truckstop.com noted. “For example, increases in dry van and refrigerated spot rates during the week ending July 4 this year were significantly larger than typical for the mid-year peak. However, in both cases, spot rates quickly returned to the seasonal pattern.”
A surge in load postings following Thanksgiving week dramatically exceeded the recovery in truck postings, pushing the Market Demand Index up to 107.5, the strongest level since International Roadcheck week in May.
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