The truckload freight market is showing early signs of stabilization after a dramatic downturn in capacity and pricing that began in 2022. Large U.S. truckload carriers, which cut fleets significantly during the downturn, are now scaling back their efforts to further reduce capacity, signaling the start of a market recovery. For U.S. shippers, this shift could be crucial in understanding future logistics strategies, rate trends, and how to approach contract negotiations heading into 2025.
Carrier Capacity Cuts: A Response to Freight Demand Shifts
Over the past two years, large truckload carriers have reduced their fleets at rates comparable to those seen following the 2008–09 recession. According to the Journal of Commerce Truckload Capacity Index (TCI), the overall truck count for large carriers has decreased by 14.1% since late 2022, with some major players like Werner Enterprises reducing their fleets by 13.4%. These cuts reflect the sharp decline in freight demand that hit the market in 2022, but as of the third quarter of 2024, the pace of fleet reductions has slowed, and truckload capacity is stabilizing.
This shift is a sign that carriers are now reining in further capacity cuts, as the truckload market begins to stabilize and the industry looks toward 2025. According to Derek Leathers, CEO of Werner Enterprises, there are "positive signs that we believe point to the early stages of an improving operating environment," and even contractual rate increases have been secured for some clients. Shippers who have weathered the past couple of years of fluctuating rates may now find that the days of steep declines in truckload pricing are behind them.
Truckload Capacity Index Shows Signs of Stabilization
The TCI, which tracks the number of trucks fielded by large, publicly owned carriers, dropped by just 0.3 percentage points in the third quarter of 2024. This marks a significant slowdown in the previous trend of constant capacity reductions. The 76.6% reading in the TCI for the third quarter is the lowest it has been since 2014, but it is only marginally above the lowest levels observed after the 2008–09 recession.
The broader trend suggests that large carriers have already shed the most excess capacity, and while some tightening is still expected, truckload capacity may not experience the sharp declines seen in the past few years. Shippers can expect to navigate a market with more predictable capacity moving forward.
Dry Van Rates Stabilizing Amid Rising Demand
Dry van truckload spot rates, a critical indicator for freight pricing, have seen a period of stability. After holding steady at $1.65 per mile (excluding fuel surcharges) for several weeks, rates rose slightly to $1.66 per mile, which is still 10 cents higher than the same time in 2023. According to DAT Freight & Analytics, dry van contract rates are seeing annual increases of 1% to 2%, indicating a modest shift away from the sharp declines of previous years.
Dean Croke, principal analyst at DAT, noted that shippers are beginning to accept that "the days of rate decreases are behind them." As we head into 2025, this stabilization in pricing is likely to continue, with some gradual rate increases expected as carriers focus on rebuilding their fleets and securing more favorable contracts.
Small Carrier Exits and a Return to Equilibrium
Another factor influencing capacity is the exit of small carriers from the market. Since 2022, approximately 35,000 to 40,000 smaller trucking companies have closed their doors or been acquired. While this has reduced overall competition, the number of active carriers is still significantly higher than pre-pandemic levels. As of October 2024, there were still 93,100 more active carriers than in December 2022, according to the Federal Motor Carrier Safety Administration (FMCSA).
Despite the loss of small carriers, the rate of exits has slowed dramatically, and the market is beginning to rebalance. This has created a more stable environment for shippers who had to navigate a more fragmented and unpredictable carrier landscape during the pandemic.
What This Means for Shippers in 2025
For U.S. shippers, the upcoming year presents a more stable market for truckload shipping, but with certain key challenges to watch out for:
Contract Negotiations: With truckload capacity stabilizing, shippers should expect more modest rate increases in 2025. The aggressive rate declines of the past few years are over, and shippers will need to plan for incremental cost increases in their logistics budgets.
Capacity Planning: While the market is stabilizing, there is still some uncertainty. Shippers should work closely with carriers to ensure they have access to adequate capacity, especially as freight demand starts to rise again.
Carrier Relationships: Strong relationships with carriers will be essential. Carriers like Werner Enterprises have already signaled a return to growth, and shippers who maintain high customer retention rates may be in a better position to negotiate favorable terms as capacity tightens again.
Conclusion
The U.S. truckload market is entering a period of stabilization, with large carriers scaling back fleet reductions and pricing stabilizing after the steep declines of 2022 and 2023. While demand remains weak, the outlook for 2025 suggests a more balanced environment, with shippers seeing more predictable capacity and steady, modest rate increases. For shippers, this means adjusting logistics strategies to account for gradual changes in pricing while focusing on long-term carrier relationships to secure capacity and favorable terms as the market continues to rebalance.
For shippers looking to navigate this evolving landscape, partnering with an experienced supply chain consultant like Gain Consulting can provide valuable insights into optimizing freight strategies, managing costs, and ensuring continued access to reliable truckload capacity in the year ahead.
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