“Join us Feb. 28 – March 3 at the Gaylord Palms in Orlando, Fla., for the truckload industry’s premier event,” TCA said. “From high-impact sessions like this to unmatched networking and celebration of our members, there’s no better place to prepare for the year ahead.” 

Costello is widely regarded as one of the most reliable voices on trucking economics. His session will cover key topics like freight demand, rate trends, consumer spending, inflation pressures, and how global markets can impact U.S. trucking. Drivers and carriers attending will walk away with insights to help plan routes, negotiate rates, and make smarter decisions for 2026. 

“Bob will unpack the trends shaping truckload in the year ahead,” TCA said. “From freight demand and rates to consumer spending, inflation pressures, and the broader global economy. His insights will help you anticipate challenges, identify opportunities, and align your strategy with the realities of today’s market.” 

Truckload 2026 also promises entertainment and networking beyond the economic sessions. NFL legend Jimmy Johnson will give the keynote, while Sugar Ray will close out the event with a live performance. Attendees can combine industry learning with a chance to relax and connect with peers from across the country. 

For truck drivers, small fleet operators, and dispatchers, sessions like Costello’s aren’t just numbers on a chart. They provide practical information that can affect pay, freight planning, and business decisions for the year ahead. 

Source: The Trucker 

Image: American Trucking Associations

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A Shared Struggle for Trucking Companies

“Directly or indirectly, virtually all trucking companies are victims of cargo theft. Either they are victims of crime, or they are spending so much money to defend against being targeted that they are still victims,” said Costello. “ATA looks forward to working with committee members to safeguard the entire supply chain, including trucking, to protect businesses and their employees as well as lower costs for consumers.”

Congress has recurringly focused on cargo theft, with ATA stepping in as an essential voice twice in under two months.

The Staggering Cost of Cargo Theft

According to ATA data, freight-related crimes cost the supply chain up to $35 billion annually, indirectly driving up consumer prices. Since early 2021, “strategic theft” has skyrocketed by 1,500%, with the average value of stolen shipments exceeding $200,000 per incident.

Cargo theft takes various forms, from breaking into parked tractor-trailers and double-brokering fraud to cyberattacks and long-term pilfering. Criminals increasingly use advanced digital tactics to outwit carriers.

During testimony earlier this year, Adam Blanchard, an ATA member, shared a firsthand account of cargo theft. Blanchard’s company fell victim to identity theft and related fraud. Despite reporting the crimes to insurance providers, local law enforcement agencies, the FBI, and the Department of Homeland Security, little actionable support was provided.

A Complex Crime Demanding Federal Action

“Due to the complex, multi-jurisdictional nature of these crimes, only the federal government has the resources and technical capabilities to take down organized theft groups,” ATA stated in a press release.

Recognizing this challenge, ATA recently endorsed the Combating Organized Retail Crime Act, designed to establish a unified federal response to these transnational crimes. ATA emphasized that organized cargo theft rings often operate across state and national boundaries, which demands a cohesive, large-scale federal strategy.

As part of its 2024 agenda, ATA has also prioritized security measures, including the fight against cargo theft and cybercrime, as essential pillars supporting the trucking industry and protecting businesses and consumers.

Cargo theft is no longer just a trucking issue; it’s a supply chain-wide crisis with profound national economic implications. Addressing this threat is crucial for businesses and lawmakers alike to ensure a more stable, secure, and cost-efficient flow of goods.

Source: The Trucker
Image Source: ATA

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“I really thought we were coming out [of the freight recession] as an industry,” Costello said. “The economy as a whole was slowing down before the tariffs, but the things that drive truck freight were moving in the opposite direction. I thought things were going to get better.”

That brief optimism has since been shaken. A fresh round of tariffs from the Trump administration has thrown new pressure onto the freight economy, threatening to disrupt the fragile recovery that had only just begun. While the administration’s approach may be aimed at strengthening American manufacturing long term, Costello said the near-term consequences will be higher prices and tighter supply chains.

He noted that more than 70 countries have shown interest in negotiating trade agreements in response to last week’s tariffs, and there’s still a chance that some of the measures could be reversed or restructured. For Costello, that would be the best-case scenario. The markets briefly reflected that hope, bouncing slightly on Tuesday. He believes a targeted tariff strategy would be far more effective than broad, sweeping actions and could help ease the uncertainty that’s been creeping into economic forecasts.

“If the administration backed off quickly and said they got what they wanted, it would help us get back on track to where we were hoping to be,” he said.

Costello said he spent last Friday revising most of the key economic indicators impacting truck freight, adjusting expectations for 2025 from modest growth to stagnation or outright contraction. What had been a cautiously optimistic outlook for the year now points to flat or even declining performance across multiple fronts. Before the tariffs were announced, ATA had forecast U.S. GDP to grow by 1.4% in 2025, with quarterly growth at 1.2%, 1.6%, and 2.1%. As of Friday, those numbers have dropped to 0.3% for the year, and 0.5%, 0.3%, and 0% for the final three quarters.

The outlook for freight-related sectors isn’t faring any better. Factory output, originally expected to rise by 1.3% this year and 2.5% in 2026, is now forecast to decline by 1.0% and 0.8%. Previously projected to grow by over 2.0%, consumer spending on goods has been slashed to just 0.5% in 2025 and 0.6%. Even housing starts have taken a hit. Still, Costello urged the TRALA audience not to treat the latest numbers as set in stone. With tariff decisions evolving so quickly, the ATA has started time-stamping all of its forecasts. Any shift in trade policy—positive or negative—could immediately make the current data irrelevant.

Despite the volatility, Costello hasn’t ruled out a rebound. He emphasized that conditions were genuinely improving before the latest policy shifts. “Excluding the tariffs for a moment, things were starting to move in the right direction. It was going to get a little bit better and fleets were going to feel a little bit better,” he said.

Costello also flagged another possible future disruption—one tied to an ongoing investigation into Chinese shipbuilding and maritime practices. Earlier this year, the Trump administration released recommendations from the Biden-era U.S. Trade Representative that call for steep port call fees, ranging from $1 million to $3 million per entry, for Chinese-linked ships. These proposed penalties, aimed at curbing what the USTR labeled unfair trade practices, could severely impact the flow of imports into U.S. ports if enacted. However, Costello noted that the administration may reconsider the timing and scale of those fees amid industry pushback.

While the trucking industry just endured one of its longest freight recessions on record—27 months of sluggish conditions—Costello fears another downturn could be far more damaging. Many carriers were only just starting to regain their footing. “If another recession hits right now, it could be devastating for carriers who were finally starting to swim again after years of treading water,” he said.

For now, trucking’s path forward remains deeply tied to Washington’s decisions. Costello’s message was clear: the ingredients for recovery are still there, but so is the risk of letting it all unravel.

Source: Commercial Carrier Journal

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Bob Costello, Chief Economist and Senior VP of International Trade and Security Policy at the American Trucking Associations (ATA), delivered his 2025 Economic Industry Review. He outlined how these proposed tariffs would affect the trucking sector, from increased equipment costs to significant changes in freight patterns.

Tariffs and Their Ripple Effect

One of the proposed tariffs’ most surprising impacts is how they may alter freight patterns. Costello touched on the potential fees suggested by the U.S. Trade Representative’s office, which include up to $1 million per port call for Chinese vessel operators and $1.5 million for shipping companies using Chinese-built vessels.

Costello explained, “It absolutely could change freight patterns. I think it’s a really big deal.” Such high charges could discourage shipping lines from making multiple port calls, potentially consolidating their stops. “What they’re probably going to do is dump all of the cargo in one port and move on,” Costello noted.

This shift impacts not only imports but also export activities along the East Coast. Smaller ports that play a vital role in local industries may suffer. For instance, factories in Alabama rely on the Port of Mobile for exports. “There’s a good chance a lot of these ocean carriers are not even going to make that call and not go to Mobile anymore,” he added.

Consumer Behavior Drives Freight Patterns

Costello predicted a gradual return to standard freight patterns in 2025, following consumer-driven spending habits that delayed economic recovery. He warned, however, that implementing additional tariffs could trigger another economic downturn.

The proposed tariffs include an additional 10% on goods from China, 25% on steel and aluminum, and 25% on Canadian and Mexican imports. The latter is particularly concerning for the trucking sector as it directly affects the costs of tractors and trailers.

“If it in fact goes through … for any substantial amount of time, I think that brings in a real risk of macro recession, no doubt about it,” Costello stated. He emphasized that tariffs function as taxes, and price increases on goods will ultimately lead to consumers purchasing fewer items, dragging down freight volumes.

This follows the trend during the pandemic-fueled freight recession, where spending on goods skyrocketed due to limited entertainment and travel options. “We all remember; it was not fun. So, what did people start doing during that period? They just started buying stuff,” Costello recalled. Terms like “revenge travel” became popular as consumers shifted their focus from goods to experiences, attending concerts, or taking multiple vacations.

Now, with consumer spending normalizing and the economy showing signs of stabilization, the trucking industry faces an adjustment period.

Market Stabilization and Economic Outlook

Despite some turbulence, positive trends are on the horizon for the freight sector. Costello projects a 3.3% increase in goods spending and a 2.2% rise in spending on experiences this year. Notably, inflation for goods is currently lower than for services, encouraging higher spending on physical products.

Additionally, factory output, which declined by 0.4% in 2023 and 2024, is expected to rebound with a growth of 1.3% in 2025 and 2.5% in 2026. Although some subsectors may see slower recovery, overall manufacturing activity is anticipated to drive freight demand upwards.

The housing market also shows promise. Costello forecasted consistent growth in existing home sales, prompting an uptick in expenditures for home improvements. Meanwhile, new housing starts, estimated at one million, are likely to generate substantial freight opportunities.

“It wasn’t like the boom of the pandemic, but it’s certainly much better, and I think that is absolutely going to help,” Costello concluded.

Source: Commercial Carrier Journal

Image Source: Angel Coker Jones

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The industry has faced hurdles of over-capacity and low demand since the pandemic, and Costello admitted feeling “snake bitten” by a recovery that seemed elusive. “We haven’t seen normal since the pre-pandemic,” he explained. “Every cycle is different, this one included.”

While the overall economy is slowing, Costello reassured that a recession seems unlikely. Key drivers of truck freight are stabilizing, with some even showing signs of improvement. He anticipates a 2% rise in manufacturing output across sectors like chemicals and primary metals next year, with computers expected to see a 6% boost.

Consumer Behavior and Economic Trends

Post-pandemic, consumer spending shifted towards experiences over goods, but Costello observed a reversion back to pre-pandemic norms. Although housing remains challenging due to interest rate hikes, the Federal Reserve has begun reducing rates, albeit with long-term effects. “It takes a long time for decreases to work their way through the economy,” he noted.

The job market is also loosening, with monthly additions of 200,000 jobs and sustained low unemployment rates. Costello highlighted that there is approximately one job available per unemployed individual, boosting the Fed’s confidence to continue lowering rates. While fixed mortgage rates are declining, he cautioned against expecting drastic changes. “It’s not going to come down as much or as fast as the Fed Funds rate,” he remarked.

Looking ahead, Costello anticipates an uptick in home sales by 2025, with steady single-family housing starts and moderate growth in non-residential construction. Wage growth remains steady, contributing to increased purchasing power. However, he warned about record household credit card debt, which may hinder spending despite favorable delinquency rates.

Inflation has reduced to 2.4%, yet the cost of goods remains elevated, up 22% since 2020. This shift in consumer focus from services back to goods could stimulate freight movement. “Let’s go ahead and buy something,” Costello encouraged. “Remember, we haven’t bought goods in a while.”

Freight and Supply Chain Dynamics

Though freight recovery has been slow, Costello noticed signs of progress. Private fleets expanded during the pandemic, reducing available freight for hire, but as recovery continues, some carriers might exit the industry. Lenders are poised to demand repayments, potentially pushing fleets out as used truck valuations improve.

The digitization of freight has provided temporary relief to carriers, enabling quicker cash flow, albeit with negative margins. However, Costello warned that “eventually, it’s going to run out.”

While supply remains high, demand hasn’t risen enough to feel its impacts. Costello emphasized, “More companies need to fail.”

Since December 2022, around 34,000 carriers have left the market, often joining larger operators. This gradual supply-demand balance could mitigate driver shortages as freight demand rebounds.

Market and Political Pressures

The trucking industry faces pressures from both market conditions and rising costs. Revenue per mile has decreased significantly, while driver wages and operational costs hit record highs, up 35% compared to a 16% revenue increase.

Despite these challenges, Costello sees potential improvement in truck freight segments.

Source: Commercial Carrier Journal

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Bob Costello, the chief economist for the American Trucking Associations, noted, “We’re no longer going to be deteriorating anymore. There’s a chance we are at the beginning stages of that cycle changing.”

The extensive downturn followed an unprecedented boom period influenced by the pandemic. The surge in consumer demand for goods during lockdowns drove significant freight volumes and elevated rates. This spike tested the limits of ports, rail systems, and trucking fleets, almost collapsing the entire supply chain and prompting many new trucking companies to enter the market.

However, the decline was swift and stark. As restrictions lifted, consumer expenditure shifted towards services such as dining and entertainment, reducing the demand for transported goods. This left retailers with excess inventory and trucking firms struggling with diminishing profits.

Renewed optimism is chiefly fueled by increased port activities. Despite high interest rates and persistent inflation, consumer spending remains strong, including both goods and entertainment. Cross-border trade stays robust as Mexico attracts nearshoring investments. Additionally, reduced inventory levels might soon need replenishment.

In April, U.S. ports processed the equivalent of 2.02 million 20-foot containers, up 13% from a year earlier. The National Retail Federation indicated that May’s port volume likely increased by around 8% to 2.09 million containers, the highest since August 2022. Although last year’s port volume declined by 12.8%, the recent surge in demand is now extending to the for-hire trucking market. May’s tonnage index showed a 1.5% year-over-year increase—the first such rise in 15 months. However, Costello urges caution, stating that one month doesn’t establish a trend.

Other challenges persist. Housing starts have dropped, impacted by a rise in the 30-year fixed mortgage rate to 7.25% from less than 3% in 2021. Manufacturing has been in contraction since late 2022, except for a brief improvement in March, according to the Institute for Supply Management.

Trucking capacity remains high, as many companies that joined the market during the boom are still operational. Government stimulus for small businesses and profits from the pandemic have kept many afloat despite current losses. The average carrier’s cost per mile is approximately $1.75, excluding fuel, while spot freight rates are around $1.55 per mile, according to Jared Weisfeld, chief strategy officer at the freight brokerage RXO Inc.

Approximately 30,000 trucking companies have exited the industry since the downturn began. While this number appears substantial, it represents a minor portion of the 350,000 trucking firms with operating authority, most of which run fewer than ten trucks, according to the Federal Motor Carrier Safety Administration.

“We’ve continued to see carrier exits,” said Derek Leathers, CEO of Werner Enterprises Inc. “That has led to a situation where we’re closer to the end than the beginning.” Werner plans to downsize its fleet by up to 6% this year.

Although there have been false starts before, the recent uptick in freight demand and decrease in trucking supply hint at a potential inflection point for the industry’s recovery. While timing remains uncertain, confidence in a forthcoming rebound is on the rise.

Source: Bloomberg

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