The U.S. trucking market is beginning to recover from a prolonged freight downturn, but the improvement reflects shrinking carrier capacity more than a substantial increase in freight demand, according to American Trucking Associations Chief Economist Bob Costello.
Speaking during ATA’s annual economic and trucking update with U.S. Bank, Costello said the market has reached a turning point after several years of weak freight rates and elevated operating costs. The recovery remains uneven, with conditions differing considerably by freight sector and region.
Fewer Trucks Competing for Freight
The downturn followed the freight boom during the COVID-19 pandemic, when strong shipping demand encouraged companies to expand capacity. As demand returned to more typical levels, the industry was left with more trucks available than the market needed.
Carriers subsequently faced declining rates while operating expenses remained high. Some companies closed or reduced operations, but those reductions initially weren’t enough to balance the market. Costello said the situation has now begun to change.
“Capacity absolutely did come down. It’s just that you never felt it because it didn’t come down enough to meet demand,” he said.
Unlike previous recoveries helped by stronger freight volumes, the current improvement is driven primarily by reduced available trucking capacity. That distinction helps explain why some carriers are seeing better conditions even though overall freight activity remains relatively subdued.
Federal Enforcement Adds Pressure on Capacity
Costello identified a second stage of the downturn beginning around spring 2025, when increased federal enforcement and other pressures began affecting the number of qualified drivers and carriers operating in the market.
The Department of Transportation has tightened oversight of non-domiciled commercial driver’s licenses, English-language proficiency requirements, and commercial driver training schools. Federal officials have also worked to address improper use of B-1 business-visitor visas in trucking operations.
These measures have added to existing financial pressures, including fuel costs and court rulings affecting the industry. Together, Costello said, they have contributed to the capacity reductions now influencing the freight market.
He expects the enforcement efforts to continue despite changes in political leadership, noting that several initiatives involve administrative actions and established safety requirements. For the industry, that suggests the supply constraints helping support the recovery may remain in place rather than quickly reverse.
Shipper Spending Rises Despite Limited Freight Growth
U.S. Bank freight payment data presented during the discussion offered another indication of changing market conditions.
Costello said shipment volumes were relatively flat during the third quarter compared with the same period last year, while shipper spending increased 32%. Year-to-date shipment activity remained slightly below the previous year’s level.
The difference between shipment counts and transportation spending was particularly pronounced in states with substantial cross-border freight activity. Texas recorded a 12.9% decline in shipments so far this year, according to the figures Costello cited, even as shipper spending increased 37%.
Higher spending alongside fewer shipments suggests that transportation costs are rising in parts of the market without a corresponding increase in the amount of freight moving. However, those figures do not establish that every carrier or driver is receiving higher rates.
Freight Conditions Remain Uneven
The recovery is not reaching every trucking operation at the same pace. Costello pointed to differences in manufacturing, retail sales, and construction activity that continue to influence freight demand.
Aircraft production and equipment used in data center construction have supported portions of manufacturing output. Other segments of the goods economy have shown less consistent growth, leaving carriers exposed to different conditions depending on the freight they handle.
That variation is important when interpreting national freight indicators. An improving market overall does not necessarily translate into stronger loads or rates across every lane and equipment type.
Still, Costello said he expects the recovery to continue unless broader economic conditions deteriorate significantly. Although a recession could interrupt the improvement, he does not currently anticipate one.
Truck Orders Improve, but Capacity Growth Remains Limited
Another question is whether improving market conditions will encourage carriers to add enough equipment to reverse the tightening of capacity.
Costello acknowledged that truck sales and orders have improved, but said the industry is still recovering from several years of unusually low replacement activity. He does not expect a rapid increase in available capacity, particularly given the continuing emphasis on qualified drivers.
For now, the industry’s recovery is taking shape without the strong freight demand that has accompanied some previous upturns. Fewer available trucks, continued regulatory enforcement, and higher transportation spending are beginning to change market conditions, even as shipment volumes remain restrained.
The next indication of how far the recovery has progressed will come from whether freight demand begins strengthening alongside those supply-side changes.
The TDUSA editorial team creates practical, driver-focused content covering trucking news, industry updates, safety, regulations, and career information for professional truck drivers across the United States. Each article is built to reflect real-world experience, industry developments, and information drivers can use on and off the road.
Last Updated: November 10, 2026
Source: Transport Topics
