Truckload’s path to equilibrium

The U.S. truckload market has undergone significant transformation since the COVID-19 pandemic, with the industry experiencing dramatic swings in capacity, demand and pricing. In the aftermath of the pandemic, the truckload market found itself awash in excess capacity. This oversupply stemmed from a combination of factors, including the entry of new carriers during the pandemic-era freight boom and subsequent softening of demand as consumer spending patterns normalized. The oversupply situation was further complicated by volatile trade policies, with tariff rhetoric accelerating in early 2025 and creating uncertainty in import patterns.

As market conditions deteriorated, thousands of small- and midsize trucking carriers faced unsustainable economics, leading to widespread business failures and market exits. This natural, if painful, adjustment mechanism began to rebalance the supply-demand equation that had tilted heavily in shippers’ favor during the post-COVID era.

The exodus of carriers was driven by significant cost pressures. Publicly traded freight brokerage RXO noted in its quarterly market report that “the average cost to operate a truck is 34% higher over the past decade but absolute spot rates are largely the same as they were in 2014.” This economic reality made it increasingly difficult for carriers to maintain profitability, particularly smaller operators without the scale or financial resources to weather prolonged market weakness.

According to RXO, the truckload market “has remained relatively calm” with spot rates continuing to step higher despite disruption from rapidly changing tariff policies. The market has followed a trend – largely in place since 2023 – of soft freight demand, reductions in carrier capacity and gradually stabilizing rates.

The situation created what RXO described as “a difficult landscape for carriers,” with many “running with unsustainable unit economics.” This harsh operating environment accelerated the pace of carrier exits, despite “a couple of atypical months of operating authority growth in March and April.”

By mid-2025, the prolonged exodus of carriers finally brought the market closer to equilibrium. As RXO observed in its quarterly forecast, “We’re as close to equilibrium, in terms of carrier supply and shipper demand, as we’ve been in over two years.” The broker noted that “relatively speaking, the capacity situation is much more fragile than at this time last year.”

This newfound balance began manifesting in key market indicators. The national average Outbound Tender Rejection Index, which measures the percentage of tendered loads rejected by carriers, climbed to 6.67% by June 2025 – reaching the threshold where rejections start putting inflationary pressure on spot rates. Most enterprise shippers prefer to maintain tender acceptance percentages in the upper 90s, meaning many were already experiencing problematic service levels.

The data showed significant improvement in rate trends as well. TL spot rates (excluding fuel) were up 9.1% year over year in the first quarter of 2025, following an 11.6% growth rate during the fourth quarter of 2024. Contractual rates also increased 1.4% year over year in the first quarter – the first annual increase since the end of 2022.

A notable development in the recovering market has been the emergence of significant regional disparities. By June 2025, tender rejection rates for truckload shipments originating in the Southeast surpassed 10% – marking the first time in nearly three years they reached that level. In contrast, rejection rates for freight departing the West Coast remained well below the national average and were the lowest among the seven major U.S. regions.

This contrast was particularly striking given the focus on imports and Southern California ports that handle the bulk of U.S. container traffic. While tender volumes out of the Southeast were down 6% year over year, West Coast volumes declined 14% annually, suggesting that demand alone wasn’t driving the regional disparity.

Part of the explanation lies in intermodal transportation patterns. Much of the long-haul freight demand from the West shifted to rail, with intermodal capturing a large share from the truckload sector. Loaded container volumes moving by rail out of Los Angeles remained up year over year, even as they dipped alongside declining import levels. Meanwhile, long-haul tender volumes out of Los Angeles dropped 26% annually.

The Outbound Tender Rejection Index measures the percentage of truckload tenders rejected by carriers and serves as an indicator of the relative balance of supply and demand in the truckload market. (Chart: SONAR. To learn more about SONAR, click here.)

By June 2025, the “interior” markets of Atlanta, Chicago and Dallas showed the tightest capacity conditions among major freight centers. Atlanta’s outbound tender rejection rate reached 8.89%, continuing an upward trend that began in late February. Chicago’s rejection rate stood at 7.07%, while Dallas reported 6.86% – all above the national average.

The market trajectory for truckload rates remains “inflationary,” according to RXO, though trade policy presents a significant wild card. The 3PL classified the early part of 2025 as “still primarily a shippers’ market” but noted that “with a continued difficult landscape for carriers, and (in many cases) decreasing 2025 contract rates setting in, it could set the stage for volatility later in 2025.”

The broader trend for 2025 calls for more carrier exits and high operating costs to keep upward pressure on rates. RXO pointed to the possibility of a more material uptick in rates if trade tensions calm ahead of peak season and carrier exits become more pronounced. In that scenario, “contract rates and routing guides set in the softer market of 2024 may not survive a tighter market late in 2025, when the spot market will likely become more lucrative than the contract market.”

Transportation prices were forecast to be significantly higher a year from now, with industry respondents returning a reading of 75 for the pricing outlook in the Logistics Managers’ Index. There is a growing consensus that “the worst-case scenarios associated with potential tariffs will not come to pass,” and 2026 could reflect a more robust transportation recovery, barring a macroeconomic recession.

The U.S. truckload market has traveled a difficult road since the pandemic, moving from extreme oversupply to a more balanced state through the painful but necessary process of carrier exits. This gradual market healing has finally restored equilibrium between supply and demand, enabling carriers to regain pricing power as evidenced by rising tender rejection rates and strengthening spot market conditions.

The market remains sensitive to external shocks, particularly trade policy developments and potential economic headwinds. However, the significant reduction in truckload capacity over the past year has made the market more responsive to even modest demand changes. As one analyst noted, “a significant reduction in truckload capacity over the past year has made the market more vulnerable. Even with a somewhat bearish outlook for demand, the truckload sector appears increasingly reactive — and poised for volatility.”

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