The Calm Before a Freight Storm

Right now, trucking feels stuck in neutral. Freight demand is weak, spot rates have cooled, and both carriers and brokers are under strain. Many in the industry describe this moment as the calm before the storm, with indicators pointing toward a major correction that could rival the market chaos of the COVID years.

The warning is clear: if 600,000 drivers leave the market, capacity will tighten quickly and spot rates could skyrocket. Unlike during the pandemic, there will be no surge of new immigrant drivers to fill the gap. That relief valve, once supported by open immigration policies, is now closed. Carriers will have to compete harder for qualified drivers through better pay, sign-on bonuses, and improved working conditions.

What’s Fueling the Freight Downturn

Freight volumes are down 18 percent year over year, hitting carriers of every size. For freight brokers, the challenge is even tougher. With fewer loads to move, margins have evaporated. Some are stuck with contract rates signed too low to stay profitable, forcing them to compete against asset-based carriers while losing money on every run.

Small fleets are feeling the squeeze most. Many have relied on non-domiciled CDL drivers, but new federal regulations around English Language Proficiency are cutting off that supply. On top of that, fraud in load boards and verification systems has exploded. Scammers have found ways to manipulate tools like Highway and RMIS, forcing brokers to be more cautious.

That means even legitimate carriers can be flagged by mistake. Once that happens, they can be locked out of most brokerage freight entirely, which can be a death blow for smaller operations already struggling to stay afloat.

How New Rules Could Wipe Out 600,000 Drivers

This expected capacity purge ties directly to federal regulatory changes and immigration enforcement already underway. According to research from J.B. Hunt, new rules for non-domiciled CDL holders and English Language Proficiency requirements could remove between 214,000 and 437,000 drivers, roughly 5 to 12 percent of the U.S. driver pool over the next few years.

On September 26, 2025, the Federal Motor Carrier Safety Administration issued an emergency ruling that restricts the issuance and renewal of non-domiciled CDLs. Officials estimate that 97 percent of the 200,000 drivers who currently hold those licenses will not meet the new standards and will likely exit the industry within three years. That alone represents 5 percent of all registered CDLs in the country.

Stricter enforcement of English Language Proficiency standards has already led to 23,000 violations, including 5,000 out-of-service orders. Analyst Avery Vise projects that this enforcement could sideline about 20,000 drivers each year.

When combined with limits on undocumented drivers and new hiring restrictions, transport economist Noël Perry estimates that more than 600,000 drivers, about 17 percent of the active workforce, could be removed from trucking.

Carriers that rely heavily on immigrant labor or those unable to comply with the new regulations may not survive this purge.

The Economic Ripple Effect

These rule changes, combined with a long freight recession, are creating a perfect storm for widespread bankruptcies. Both carriers and brokers are tightening budgets and consolidating operations as the industry braces for a market reset.

The shakeout is expected to favor larger, well-capitalized carriers who can handle the new compliance demands and stay profitable through the downturn. Smaller carriers that grew quickly during the post-COVID freight boom may not have the financial cushion to adapt.

As capacity tightens, driver pay is likely to rise. Carriers will need to offer stronger incentives to attract qualified drivers from a shrinking talent pool. The shift could finally bring the market back to a more balanced place where supply and demand set the rates naturally instead of desperation driving them down.

What Comes Next

The road ahead will be rough, but it could lead to a healthier trucking market. Analysts predict that after the purge, spot rates will rise again, contract rates will stabilize, and carriers that survive will see more consistent freight and fairer pricing.

The exact timing of this recovery is uncertain, but the direction is clear. Shippers should prepare for higher rates and tighter capacity, while carriers who manage to weather the storm will be well-positioned when freight rebounds.

As one industry expert put it, “If volumes pop—which doesn’t exist right now—hold on to your hat. It’s going to be one of the best freight markets that carriers have seen in some time.”

It may take time and patience to reach that point, but for those who make it through, the rewards could be worth the wait.

Source: FREIGHTWAVES

The post The Great Capacity Purge: What Truck Drivers Need to Know appeared first on Truck Drivers USA.

“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

The post Tariffs Disrupt Trucking’s Fragile Recovery Says ATA Economist Bob Costello appeared first on Truck Drivers USA.