According to DC Velocity, the U.S. trucking industry is emerging from a prolonged freight recession as demand recovers and capacity tightens, with spot rates up 35% to 36% this year and contract rates projected to rise 10% in 2024 and another 10% in 2025.
Rising Rates and Tightening Capacity
Avery Vise, vice president of trucking for FTR Transportation Intelligence, reports that supply has fallen below equilibrium with demand over the past six months after three years of steady capacity attrition. Spot truckload rates have surged 35% to 36% year-to-date — “most of which already is baked in,” he notes — while contract rates are forecast to increase 10% this year and another 10% next year. He explains that “the spot market has likely fully reset” and is “no longer a refuge for shippers who want a better deal.”
Unlike prior recoveries driven by accelerating volume, today’s rebound reflects “a slight volume increase on top of extraordinarily tight capacity,” Vise says. Though regulatory actions may have disrupted small operators, he stresses that the core driver is economics-driven supply correction: “Headlines don’t translate into capacity.” Brokers report growing reluctance among immigrant drivers to accept loads east of Colorado due to heightened immigration enforcement perceptions.
Intermodal volumes in July reached their highest level since November 2021, reflecting a shift from over-the-road to rail amid dry van rate pressure. Vise believes that mode-switching has likely peaked, but contract rate growth will continue in absolute terms for about another year.
XPO’s Strategic Expansion
Ali Faghri, chief strategy officer for LTL carrier XPO, confirms that industrial markets — which account for roughly two-thirds of the LTL market — are gaining momentum, particularly manufacturing. XPO reported tonnage up 4% year over year in June, an acceleration that “exceeded our expectations and is well ahead of seasonal norms.” Since 2021, the company has added 30% more trailers, 20% more tractors, and 15% more dock doors. It ended the quarter with 30% excess door capacity, enabling scalable service without compromising reliability.
Faghri emphasizes that XPO’s investments were made deliberately during the downcycle to position for recovery. “That’s a meaningful signal for where freight demand is headed,” he says, referencing the upbeat ISM report as a leading indicator of industrial activity.
He also notes a strategic pivot among customers: “We are seeing more conversations around growth, capacity planning, and longer-term supply chain solutions” — moving beyond cost-focused discussions toward collaborative, forward-looking partnerships.
Retailer Priorities Shift to Partnership and Efficiency
Jess Dankert, vice president of supply chain at the Retail Industry Leaders Association (RILA), observes that retailers are less concerned with volume fluctuations than with rising operational costs and how they’re passed along. “Retailers are very concerned about how to keep [trucking] costs manageable, while meeting needs for timely and flexible trucking resources,” she says.
Dankert highlights efficiency levers such as reducing empty miles, increasing backhauls, and leveraging technology for better transportation planning. She underscores a decisive industry shift: “It’s more of a focus on strategic, committed partnerships versus transactional relationships.” Carriers are now evaluated not just on rate but on total cost to serve, service quality, and supply chain flexibility.
“They are not only focused on the rate, the transaction,” Dankert adds. “It is more of a strategic, collaborative, joint planning approach.” This proactive engagement helps ensure dependable capacity, reliable service, and more predictable costs across the ecosystem.
Source: DC Velocity
Compiled from international media by the SCI.AI editorial team.
