KISSIMMEE, Fla. — Market conditions are beginning to improve, mainly due to fewer trucks on the road to haul what freight is available, according to the American Trucking Associations’ Bob Costello.
The ATA’s SVP and chief economist said in an address during the Truckload Carriers Association’s annual conference on March 2, citing Department of Labor data, that fleets are shedding drivers. Policy changes impacting issuance of non-domiciled commercial driver licenses and English language proficiency are also contributing to the declining number of drivers
Another factor reducing capacity is a prolonged freight recession that has lasted nearly four years. Costello said excess capacity has lingered in the market and has been slow to leave, but he does expect more carriers to exit along with drivers.
“Supply has been slow to leave, painfully slow,” Costello said. However, he does expect additional contraction as the industry is now in what Costello described as a supply recovery.
“Supply-based recoveries are more difficult, but it is happening,” he said.
In this scenario, freight rates traditionally rise and market conditions improve because capacity shrinks, not because of rising demand from shippers. The Cass Transportation Index February report noted spot capacity remained tight in early March, which positioned rates to accelerate.
Costello acknowledged that recent economic indicators including the purchasing manager’ index for manufacturing have given carriers reasons to be optimistic in a market recovery, but he also cautioned executives before deciding to put more trucks on the road.
Economic growth has stemmed more from rising demand for services rather than growing freight demand, Costello said.
“Goods are not falling generally across the board and there are pockets of strength,” he said. “But there is not a tidal wave of freight coming at us.”
Costello noted that shipments improved in January, adding that was the best month ATA has seen since October 2024.
“I think we’ve sort of hit the bottom here, and hopefully start to come up a little bit,” he said.
