U.S. Freight Market Update

​​After a prolonged freight downturn over the past two years, the U.S. trucking industry is finally seeing faint signs of recovery. Market conditions that truckers describe as some of the most challenging in memory are beginning to ease, even if improvement is gradual​. Rates and volumes had hit painful lows in 2023-24 while operating costs kept climbing – a combination that Bob Costello, chief economist of the American Trucking Associations (ATA), likened to a freight-sector “stagflation.” But as Costello told attendees at the Truckload Carriers Association’s Truckload 2025 conference in March, “things are going to get better… we are absolutely moving in the right direction”​. This report examines the current state of the freight market – the emerging recovery, key metrics like spot rates and load-to-truck ratios, ongoing challenges with costs and capacity, and strategies truckers are using to weather the storm. We’ll also review economic indicators (consumer spending, housing, inflation) that are shaping freight demand as drivers plan for the rest of 2025.

Signs of Life After a Long Freight Recession

The recent freight recession lasted roughly 27 months, longer than the Great Recession’s 11-month freight downturn​. Truckload volumes in both contract and spot markets fell steadily from their 2021 peaks. By 2024, contract freight volumes were down about 3.2% year-over-year and spot market loads had plunged ~30%​. “I think we’re all flabbergasted with how long this has lasted,” said Dave Williams, a senior vice president at Knight-Swift Transportation, speaking on a carrier panel at TCA’s annual convention​. Many fleets expected a rebound long before now. Instead, they endured over two years of soft freight demand and depressed rates. Costello noted it was a “slow, slow tearing off of the band-aid” – a shallow but painfully drawn-out decline of about 8.8% in freight tonnage (versus the 23.8% drop in 2008–09)​.

Encouragingly, experts at Truckload 2025 pointed out that the worst may be over. Costello observed that freight volumes are improving and excess capacity is leaving the market, which is helping restore balance​. “It’s not going to be the pandemic boom, but we are absolutely moving in the right direction,” he said​. In early 2025, ATA data showed spot market load volumes finally stabilizing and even inching up. After a brutal 30% year-over-year drop in 2024, spot load postings were down only 7.3% year-over-year in Q4 2024 and essentially flat (-0.9%) by January 2025​. February brought the first notable uptick – spot load posts were nearly 20% higher than a year prior, indicating demand has begun to firm​. ATA’s Trucking Activity Report shows contract truckload volumes (green line, index baseline 100 in Jan 2020) fell modestly through 2023, while spot market load postings (blue line, right axis) plummeted ~30% in 2024 but started ticking up in early 2025​. Even large fleets that primarily haul contract freight sense a turning point. “We had expected to see a recovery [sooner]… [now] we expect things to get better,” Knight-Swift’s Dave Williams noted, striking a cautiously hopeful tone. Still, he emphasized that in the meantime his company is “looking at costs in order to keep ourselves afloat, recognizing that the rate side is not helping at all.”​​

Spot Rates, Load-to-Truck Ratios, and Fuel Price Trends

One key sign of a slow recovery is the stabilization of spot freight rates in early 2025. After sliding for most of 2023, national spot prices hit a floor and have even seen slight improvements in some segments. In February 2025, the average spot van rate was about $2.04 per mile, which is down 11¢ from the January average​. Reefers averaged about $2.36/mile (down 18¢) and flatbeds $2.45/mile (actually up 1¢)​. These rates are far below the highs of 2021, but notably van and reefer spot rates in Feb 2025 were higher year-over-year for the first time in many months​​. In fact, dry van spot rates were ~12% higher in one major Northeast regional lane compared to a year prior​. This hints that pricing may have bottomed out. Meanwhile, contract rates (which lag spot moves) have been relatively steady – for vans about $2.43/mile in Feb (just 1¢ lower m/m, though ~7¢ lower than Feb 2024)​. The gap between contract and spot rates, which was unusually narrow in 2023, widened again this winter in favor of shippers​. That signals how soft the spot market had been, though the recent firming of spot rates should start to close that gap going forward.

Another important barometer is the load-to-truck ratio (LTR) – the number of loads available per truck on load boards – which reflects the supply-demand balance. The dry van load-to-truck ratio averaged around 4.0–4.5 loads per truck nationwide in early 2025, up significantly from the extreme lows of the downturn​. For example, during the first week of February the van LTR was ~4.44, whereas January’s average was over 7, and a year ago it was barely 3​. (A higher LTR means demand is outpacing capacity; a ratio in the mid-single digits is closer to a “balanced” market, whereas 2021’s hot market saw double-digit ratios.) Reefer demand remains more robust – in February the reefer LTR was about 8 loads per truck, down from a January spike of ~11​. Flatbed capacity tightened early in the year as well, with flatbed LTR jumping ~50% from December to January​(reflecting early construction project freight and shippers rushing spring freight ahead of potential tariffs​). Year-over-year, load-to-truck ratios are much improved across the board – van and reefer LTRs were ~40–50% higher this January than in January 2024, a sign that excess capacity is slowly being absorbed​.

Average dry van spot rates by region (per mile) as of Feb 2025. The Midwest led with ~$2.38/mile, while the Southeast lagged near $1.94​. National van spot rates have stabilized around the low $2 range, off their peak but no longer in freefall.

In practical terms, OTR drivers are seeing some lanes pay a bit better than late last year. The DAT regions map (above) shows how in February the highest van rates were in the Midwest ($2.38) and West ($2.16), whereas the Northeast and Southeast averaged below $2.00 per mile​. Many truckers continue to rely on the spot market for backhauls and extra loads, so even modest rate increases in early 2025 have provided some relief. However, freight professionals caution that the recovery is slow and uneven. As one industry analyst put it, the market’s shape in 2025 “will probably be more like the 2013–2017 cycle than the rollercoaster of 2018–2022” – in other words, a gradual return to normalcy rather than an immediate spike​.

Fuel prices remain a wild card for truckers’ budgets, but lately there is good news on this front. Diesel prices have come down from the highs seen in 2022 and early 2023. The national average diesel price in February 2025 hovered around $3.65–$3.70 per gallon, which is about 44 cents cheaper than a year ago​. Prices were fairly stable over the winter, even dipping a few cents from January to February​. Regionally, fuel costs still vary widely – from the Gulf Coast (around $3.39/gal) to California (around $4.80/gal)​. The map below shows diesel averages by region as of February: notably California and West Coast truckers face fuel well above the national average, while the cheapest diesel is in oil-producing regions like Texas and the Gulf states. Lower fuel costs have helped ease one pressure on trucking operations, and also reduced fuel surcharges for shippers. Going forward, the trajectory of oil prices (influenced by global events and policy) will remain an important factor in carrier costs. For now, at least, diesel is cheaper than last year – a welcome development for those filling up big rigs.U.S. diesel fuel prices by region (per gallon) as of February 2025. Nationwide, diesel averages around $3.67/gal, down from roughly $4.11 a year ago​. Truckers in California pay the most ($4.80), while Gulf Coast states see the lowest prices ($3.39).

Ongoing Challenges: Costs, Volume, and Capacity

Despite early glimmers of a rebound, the freight market’s recovery is far from robust, and truckers continue to face major headwinds. High operating costs are chief among these challenges. The past few years saw the cost of running a truck operation surge to record levels. The American Transportation Research Institute found the average cost per mile to run a truck hit $2.27 in 2023, an all-time high (and up about 21% from the pre-pandemic average)​. While cost inflation slowed in 2023 (up <1% YoY after a sharp jump in 2021–22), virtually every expense category remains elevated. Fuel is historically the most volatile cost – and though diesel is down year-over-year, it’s still higher than pre-2021 norms. Meanwhile, equipment payments (truck/trailer leases or loans) jumped ~8.8% last year amid expensive new and used truck prices​. Driver wages and benefits have also climbed (up ~7.6% in 2023) as fleets competed to hire and retain drivers during the earlier capacity crunch​. Another big burden has been insurance and litigation costs – insurance premiums spiked over 12% due to nuclear verdicts and higher replacement costs for equipment​. Maintenance and repair costs rose too (parts/labor inflation), as did tires. For owner-operators and small carriers, these rising costs per mile have squeezed already-thin margins during the freight downturn. Many smaller trucking businesses burned through savings or took on debt to survive the past year of low rates. Larger carriers felt the pain too – Knight-Swift, for example, reported a small net loss in early 2024 and sharply cut its earnings forecasts, citing sluggish freight demand and overcapacity in the market​​.

Reduced freight volumes have been the other side of the coin. Simply put, there has been less freight to haul relative to the trucking capacity in the market. U.S. freight volumes (shipments) in late 2024 fell to their lowest levels in years – one index showed Q4 2024 shipments were the weakest since 2014​. Truckload carriers, especially those in the spot market, saw load counts dry up on many lanes. The volume downturn stemmed from several economic factors: consumers shifted spending from goods to services after COVID, bloated retailer inventories meant fewer replenishment orders, and sectors like manufacturing and housing slowed under high interest rates​. The good news is that by early 2025, this trend is starting to turn. Retail inventories have come back down to normal levels​, which means retailers may finally boost orders to restock shelves. Consumer spending is also tilting back toward goods as the pandemic-era travel frenzy normalizes – ATA forecasts goods consumption will grow about 3.3% in 2025, a healthy clip that should translate into more freight demand​.

Additionally, manufacturing output, which was in a slump, is gradually recovering; factory output is rising again and industrial freight volumes are following suit​. Still, for now many truckers report plenty of empty miles and competition for every load. Excess capacity in the trucking sector has been a major reason that even modest upticks in freight haven’t yet translated into strong rates. The trucking industry expanded rapidly in 2021–22 (with record new carrier registrations and truck orders during the boom), and that overcapacity has overhung the market. Throughout 2023 and into 2024, capacity slowly bled out: small carriers exited by the thousands (via bankruptcies or FMCSA authority revocations) and larger fleets parked or sold off under-utilized trucks​. Costello noted that this capacity correction is finally gaining momentum – “carriers continue to exit the marketplace… fewer new carriers [are] replacing the ones exiting”, which is tightening supply​​. According to DAT analytics, the barrier to entry for new trucking companies is now the highest it’s been in decades (due to high startup costs and insurance), so the industry isn’t backfilling capacity as easily​. This sets the stage for a more balanced market: as 2025 progresses, demand and supply could reach equilibrium, ending the period of excess trucks chasing too few loads. Indeed, Costello and other analysts believe a capacity shortage is possible down the line if freight demand accelerates while so much capacity has exited​. For now, though, most fleets would simply welcome a return to normal freight levels and pricing power. As one trucking CEO quipped, 2024 felt more like a “transition to better days” than the better days themselves​– and that transition is still unfolding.

How Carriers and Drivers are Weathering the Storm

In these lean times, survival has depended on tight cost control and efficiency. Carriers both large and small have been forced to run their operations as lean as possible to stay afloat until the market fully turns. Knight-Swift, for example, responded to the downturn by aggressively cutting costs and improving asset utilization. The nation’s largest truckload carrier trimmed its trailer fleet (eliminating thousands of older trailers) and even parked some tractors in weaker regions to boost its utilization metrics​​. “We sometimes take our eye off the ball on cost when the market’s really good,” Knight’s CEO observed – but not anymore​. Many other fleets likewise reduced overhead: delaying new truck purchases, deferring non-essential expenses, and optimizing maintenance schedules. Fuel efficiency initiatives have taken on renewed importance given fuel’s share of costs; this includes everything from installing auxiliary power units (to cut idling) to training drivers on progressive shifting and speed management. Some fleets renegotiated fuel hedging contracts or joined fuel-buying co-ops to get better bulk pricing on diesel.

Carriers are also squeezing more productivity out of their existing assets – a focus on asset efficiency. This can mean increasing loaded miles, reducing empty miles, and utilizing equipment more hours per day. One fleet, Mesilla Valley Transportation (known for its hyper-focus on efficiency), recently eliminated one fuel stop per truck per month by optimizing routes and fuel purchasing. That seemingly small change added up to 1,700 fewer stops monthly for their fleet and saved a lot of time and fuel​. “We are increasing our miles per day per truck by minimizing stops. We paid less for fuel, didn’t stop as much and cut down on incidents – 60% of incidents occur at a truck stop,” said MVT’s chief operations officer, explaining that every unnecessary stop wastes about an hour (or ~60 miles of driving)​. In other words, keeping the wheels turning longer translates to more revenue and lower cost per mile. Mesilla Valley also used tech tools to analyze toll roads vs. time saved, and decided to avoid many toll routes that only shaved a few minutes off trips – cutting their toll expenses dramatically with minimal impact on delivery times​. These kinds of data-driven decisions on routing and fueling can significantly improve a fleet’s bottom line in a down market.

Other companies have focused on workflow efficiency and waste reduction. Less-than-truckload carrier Old Dominion, for instance, works closely with shippers to reduce touch points and rework packaging so that freight is handled fewer times (limiting damage and labor)​​. A. Duie Pyle, another LTL fleet, empowered its employees to suggest efficiency ideas; one result was implementing a stricter idle policy with friendly competitions between terminals to cut idle time – reducing fuel burn and costs​. Across the industry, carriers are scrutinizing every process to eliminate non-value-added tasks. Even small changes (like using electronic bills of lading to speed up paperwork​) can add up to cost savings over thousands of loads.

Crucially, many fleets are also practicing revenue optimization – being strategic about the freight they haul. In a soft market, it’s tempting to chase any available load, but the most disciplined carriers are selective, focusing on lanes and customers that yield the best yield per mile. As one trucking executive put it, “We find that if you price in order to earn lanes that are most efficient, you net a greater gain than pricing into areas you’re not necessarily good at.”​

In practice, this means doubling down on core lanes (where a carrier has consistent freight or can secure profitable round-trips) and avoiding one-off forays into low-volume regions that often result in deadhead miles. Some truckers have diversified their freight mix – for example, adding dedicated contract freight or expanding into specialized segments (flatbed, tanker, intermodal drayage, etc.) to ensure a more stable revenue base. Others have negotiated accessorial charges and fuel surcharges more assertively to capture additional revenue where possible (e.g. detention pay, layover pay, etc., to offset rising costs). For owner-operators, revenue optimization might mean partnering with a reliable load board or broker that can help find higher-paying backhauls, or even temporarily leasing on with a larger carrier for access to contracted freight. The common thread is adaptability: the truckers who have survived this downturn are those who rapidly adjusted – whether by cutting their cost per mile, running more efficiently, or finding creative ways to boost earnings on each trip.

Freight Demand Drivers: Key Economic Indicators

What will determine how quickly the freight market fully recovers? A number of economic indicators bear watching, as they directly influence freight volumes in the months ahead. One of the biggest is consumer goods spending. Consumer demand drives a huge share of truck freight (from retail goods to groceries to e-commerce shipments). After the stimulus-fueled boom and bust cycle of 2020–2022, American consumers shifted a lot of spending into travel, dining, and services in 2023 – meaning less spending on tangible goods that move by truck. Now that pendulum is swinging back. ATA’s Bob Costello pointed out that “after a post-pandemic surge in services spending, consumer spending patterns are finally shifting back toward goods.” In fact, goods consumption is projected to rise 3.3% in 2025 (and another 2.6% in 2026), outpacing growth in services​. If this forecast holds, it bodes well for truckload carriers: more purchases of furniture, electronics, clothing, and other products will translate into more loads to haul from factories to distribution centers to stores. Early evidence of this trend can be seen in the retail inventory levels – which have been drawn down, implying retailers will need to order and ship more goods to meet consumer demand​. Truckers serving big-box retail and last-mile delivery are cautiously optimistic that the second half of 2025 could bring a rebound in volumes for consumer staples and seasonal goods.

Another pillar of freight demand is the housing and construction sector. Flatbed truckers especially rely on construction activity (hauling lumber, steel, building materials, machinery, etc.), and dry van carriers benefit from moves of appliances, home furnishings and the like when housing is strong. Over the past year, high interest rates put a damper on housing starts – U.S. housing starts in 2024 were down about 3.9% from 2023, meaning fewer new homes being built​. However, many economists expect a gradual pickup in residential construction heading into 2025 as mortgage rates stabilize. Costello noted that housing and construction activity is projected to help generate freight demand in 2025​. In fact, recent data showed single-family housing starts hit a 10-month high at the end of 2024​, indicating builders are beginning to work through the housing backlog. This is good news for flatbed carriers, some of whom have already seen demand holding up better than other segments – Costello called flatbed freight “one of the better sectors” lately​. Additionally, infrastructure projects funded by federal spending (highways, bridges, energy infrastructure) are ramping up, providing steady flatbed and heavy-haul freight. In short, the construction side of the economy could be a bright spot for trucking demand in 2025, offsetting any continued softness in other areas.

Inflation and broader economic trends also play a crucial role. Inflation affects freight in multiple ways: it influences consumer purchasing power, it drives up operating costs (fuel, equipment, wages), and it dictates monetary policy (interest rates) which in turn impact sectors like housing and automotive. The inflation rate in the U.S. has been cooling since its peak in 2022, which is a double-edged sword for trucking. On one hand, easing inflation has helped slow the rise of input costs – for example, diesel is cheaper and equipment prices have started to normalize. On the other hand, the Federal Reserve’s interest rate hikes to combat inflation cooled off economic growth. As Costello put it, the trucking environment of late 2023 was essentially “stagflation” – high costs with low freight growth​. Fortunately, as of early 2025, inflation has moderated to more normal levels (closer to 3% year-over-year), and there are signs the Fed may pause or even cut interest rates later in 2025 if inflation stays in check​. Lower interest rates would likely stimulate interest-sensitive freight sectors – for instance, auto sales and home building could get a boost, leading to more loads of auto parts and building materials. Another indicator to watch is industrial production and capital goods orders: manufacturing activity had been a drag on freight, but factory output is now inching up, aided by improving supply chains and strong demand in industries like automotive and energy​. If we see a sustained uptick in U.S. manufacturing (PMI indices moving into expansion territory), trucking will feel the benefits in the form of more outbound loads from plants and more raw materials moving in.

Finally, global and policy-related factors can’t be ignored. International trade volumes (imports/exports) affect port trucking and domestic intermodal volumes. Ongoing shifts in trade policy – such as new tariffs or trade agreements – can divert freight flows. For example, Costello warned that proposed new tariffs on imports from China, Mexico, and Canada could disrupt supply chains and “flatten” what would otherwise be a peak shipping season​. If shippers pull forward orders to beat tariff deadlines (as some did earlier this year), it could cause short-term volume surges followed by lulls​. On the flip side, resolution of trade uncertainties would help stabilize freight demand. Geopolitical events (like the war in Ukraine) also loom over fuel prices and economic stability​. And regulatory changes – from emissions rules to labor laws – could influence trucking capacity (for instance, stricter emissions standards might push older trucks off the road, tightening capacity). Truckers will need to stay nimble and informed as these external factors evolve.

Outlook: Planning for the Road Ahead in 2025

For Class A CDL OTR truckers, the current freight market requires a realistic, pragmatic approach. The data suggests that the freight recession of the past two years is bottoming out, with a slow climb ahead rather than a rocket-like rebound. As Bob Costello emphasized, we’re heading “back to normal” – not another unprecedented boom, but gradual improvement​. In practical terms, that means truckers should still expect competition for loads and pressure on rates in the near term, even as conditions get a bit better quarter by quarter. Cost control and efficiency will remain paramount in 2025. The carriers who honed their operations during the downturn – by cutting costs, running efficiently, and optimizing freight – are positioning themselves to thrive as the market recovers. Drivers would do well to carry those lean habits forward: manage fuel use carefully, avoid out-of-route miles, minimize downtime, and take advantage of any tools (load boards, dispatch tech, etc.) that improve productivity.

On the flip side, as the market turns upward, there may be opportunities to increase rates and improve earnings later in 2025. Spot rates are expected to firm up by Q2 or Q3 if the forecasted capacity tightening plays out​. Trucking analysts predict that by the second half of 2025, we’ll likely see a healthier balance where decent-paying freight is easier to find – especially for dry van and reefer, which bore the brunt of the downturn. Fleet owners and owner-operators should be prepared to capitalize on a better spot market by ensuring they’re operating in the right lanes and maintaining good relationships with brokers and shippers. Diversification can also be a smart move: for example, hauling different trailer types (if you have access to them) or partnering with intermodal providers could open up new revenue streams if one segment lags.



In summary, the U.S. freight market is gradually climbing out of a deep hole. The recovery is slow, but it is underway – buoyed by factors like rising goods demand, improving industrial output, and the ongoing purge of excess trucking capacity. Truckers on the front lines should continue to hang tight, controlling what they can (costs, efficiency, service quality) and staying informed about the broader economy. There are reasons to be cautiously optimistic for the latter part of 2025. As one fleet executive at the Truckload 2025 conference put it, despite the fatigue from a long slump, “things are going to get better”​. By navigating the current conditions with discipline and keeping an eye on key trends – from spot rates to fuel prices to housing starts – truckers can position themselves to ride the upswing when freight volumes and rates finally pick up steam. Better days are on the horizon, and the lessons learned during the downturn will help carriers and drivers alike thrive in the more balanced market ahead.
 
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Sources: Recent industry data and expert commentary have been drawn from ATA and TCA conference insights (Bob Costello, Dave Williams)​​, DAT Freight & Analytics reports​, the U.S. Energy Information Administration (EIA)​, and transportation news outlets including Transport Topics, Trucking Dive, Truck News, and FreightWaves​. These sources reflect the most up-to-date conditions in early 2025 and provide a grounded outlook for the trucking sector. All statistics are current as of Q1 2025 and subject to change as economic conditions evolve.
 

Industry News and Analysis:

• Transport Topics (TTNews)
  https://www.ttnews.com
• FreightWaves
  https://www.freightwaves.com
• Trucking Dive
  https://www.truckingdive.com
• American Trucking Associations (ATA)
  https://www.trucking.org

Freight Market Data:

• DAT Freight & Analytics (Spot rates, load-to-truck ratios)
  https://www.dat.com/trendlines
• Truckstop.com (Spot market load and rate data)
  https://truckstop.com/resources/market-insights

Fuel Prices:

• U.S. Energy Information Administration (EIA) – Diesel Fuel Prices
  https://www.eia.gov/petroleum/gasdiesel
• AAA Gas Prices (Diesel)
  https://gasprices.aaa.com

Economic Indicators and Reports:

• Federal Reserve Economic Data (FRED)
  https://fred.stlouisfed.org
• Bureau of Labor Statistics (BLS) – Inflation and Consumer Prices
  https://www.bls.gov/cpi
• U.S. Census Bureau (Housing starts and economic data)
  https://www.census.gov/economic-indicators

Additional Industry Resources:

• Truckload Carriers Association (TCA)
  https://www.truckload.org
• American Transportation Research Institute (ATRI)
  https://truckingresearch.org