The trucking market’s slow reboot may continue into early 2025 as spending and shipments decrease in Q4 of 2024. In the final quarter of 2024, spending declined by nearly 22%, while shipments declined by almost 16%. Dry van spot rates that have grown year-over-year have also remained stagnant in recent months. After the coronavirus pandemic, freight rates started plunging rapidly, leading to a recession bottoming out in early 2023. While the market is not in a recession compared to a few years ago, the reboot is slower than anticipated. President Trump’s recent enforcement of tariffs may directly impact trucking, which could have significant implications for the industry.
What Is Causing The Trucking Market’s Slow Reboot?
While various causes lead to the slow reboot, cyclical changes and structural shifts are the primary reasons. The trucking market tends to be cyclical and includes four significant phases: expansion, peak, contraction, and recovery. After the post-pandemic peak period, rates fell to a freight recession, the contraction phase. Experts in the industry predict that the subsequent recovery phase could start in late 2025. The slow reboot may reflect the cycle as the industry prepares for the reboot. Another potential cause of the steady reboot is structural shifts in private fleet expansions. Private fleets are carriers that retailers, manufacturers, distributors, and non-trucking businesses own and operate.
Despite the benefits that private fleets can have on the industry, they can adversely affect the industry’s reboot. Private fleets can reduce contract volumes by decreasing the demand for independent truckers. During 2024’s soft freight market, recent shifts to private fleets contributed to the sluggish recovery. Other contributors to slower reboots include increasing operating costs, regulatory pressures, and carrier exits. Over the last few years, the overall operational costs like fuel and insurance have risen, putting a strain on carriers. The strains led to bankruptcies and a significant number of trucking companies existing in the market in 2024.
How Will Trumps Tariff’s Impact The Trucking Market?
President Trump’s recent tariffs are majorly impacting international and domestic shipping. Trump has recently signed various executive orders to enforce tariffs on cargo from Mexico, Canada, and China. Other orders recently signed by Trump include a 25% tariff on aluminum and steel imports, along with an announcement of retaliatory tariffs on all U.S. trading partners. For the trucking market, there is a belief that the tariffs will help the reboot. The higher costs could cause outsourcing production to return to the U.S. This may result in a greater demand to move the finished goods to the final location by truck.
Whether the trucking industry is on an upward or downward trajectory, it should not stop your cargo’s movement. You should, however, be aware of how the state of the market could affect your shipment. Along with being current with industry trends, shippers do this by speaking to a freight broker like A1 Freight Solutions. Brokers can help you navigate the trucking industry by offering solutions like freight brokerage. We can find carriers with ideal rates and arrange the shipment on behalf of the shipper. During the journey, we provide constant updates on your shipment’s status and as it reaches the final destination. Please contact our brokers at info@a1fsinc.com or 786-375-9420 to begin shipping your cargo anywhere in the U.S.