Falling Freight Volumes, Rising Rates, Capacity Reshapes the Trucking Market

Weak freight volumes are not necessarily translating into weaker pricing. Instead, tightening trucking capacity is giving carriers greater leverage and helping push freight rates higher, creating a more favorable operating environment for fleets.

“Spot rates moving ahead of contract rates have historically signaled a tightening market, but we haven’t seen a capacity-driven market quite like this one,” said DAT industry analyst Dean Croke.

Truck freight demand remains relatively restrained, but limited available capacity is increasingly becoming the dominant factor influencing transportation pricing. Recent data from FTR and DAT Freight & Analytics shows that freight rates are strengthening even as shipment volumes decline, suggesting that the current market is being shaped more by supply constraints than by a surge in demand.

FTR’s Trucking Conditions Index remained strongly positive in June at 17.1, although it declined from May’s record 20.4. At the same time, July data from DAT showed record month-over-month increases in dry van and refrigerated contract rates, despite lower freight volumes across several major equipment segments.

The unusual combination of softer demand and stronger pricing highlights how much carrier capacity, driver availability, operating costs, and regulatory pressure are influencing the truckload market.

“We expect the market to be favorable for carriers throughout our two-year forecast horizon, but the recovery appears to be stabilizing,” said Avery Vise, FTR vice president of trucking.

FTR noted that somewhat slower rate growth in June was partially balanced by lower diesel prices, which helped improve carrier economics. The research firm also upgraded its outlook for trucking companies compared with its previous forecast.

Vise said that much of the market's strength has been generated by supply-side constraints, particularly in the dry van and refrigerated segments.

Mixed Signals for Coming Months

While supply remains the primary driver of current market conditions, there are also several positive indicators on the freight demand side.

Manufacturing activity is showing signs of recovery, consumer spending has remained relatively resilient, and continued investment in data centers, utilities, and infrastructure is generating additional demand for flatbed equipment. These sectors could provide important support for trucking volumes as the market moves through the remainder of the year.

Still, several economic risks remain. Vise pointed to slower U.S. job growth, continued weakness in housing activity, and persistent inflation as factors that could limit broader freight demand.

“Although freight demand still doesn’t look that strong, we see little sign that trucking capacity will rise substantially in the near term,” he said.

That imbalance is particularly important for carriers. Even without a major increase in freight volumes, a reduction in the number of available trucks and drivers can quickly tighten the market and give carriers more negotiating power.

Rates Rise as Freight Volumes Fall

DAT’s July figures provide some of the clearest evidence that capacity availability is influencing rates more strongly than freight volume.

Contract linehaul rates for both dry van and refrigerated freight recorded their largest June-to-July increases on record, according to DAT. The average dry van contract linehaul rate, excluding fuel, climbed 13 cents from June to $2.39 per mile, while the reefer contract rate increased 9 cents to $2.62 per mile.

The increases are particularly significant because they occurred while freight volumes moved in the opposite direction.

DAT’s Truckload Volume Index fell 6% month over month for dry van freight, 5% for reefer and 8% for flatbed. Compared with July 2025, volumes were down 3% for van, 13% for reefer and 7% for flatbed.

Some seasonal decline is normal because freight activity often softens in July following stronger June volumes. However, the decline in reefer freight was the largest June-to-July decrease in six years, underscoring how unusual the current pricing environment has become.

For carriers, the data suggests that fewer available trucks can have a greater impact on pricing than modest changes in shipment demand.

An Unusual Capacity-Driven Market

Despite lower freight volumes, spot market rates remained elevated throughout July. Excluding fuel, average July spot linehaul rates reached approximately $2.39 per mile for dry van, $2.75 for reefer, and $2.90 for flatbed.

The dry van market was particularly noteworthy because national average spot and contract linehaul rates both reached $2.39 per mile.

“Spot rates moving ahead of contract rates have historically signaled a tightening market, but we haven’t seen a capacity-driven market quite like this one,” said Croke.

“Van spot and contract rates reached parity in July even as volumes declined, while van and reefer contract rates posted record June-to-July gains.”

The year-over-year comparison is even more striking. July spot linehaul rates were 76 cents per mile higher for van freight, 79 cents higher for reefer and 86 cents higher for flatbed compared with July 2025.

Contract linehaul rates also posted substantial annual gains, rising 37 cents for van, 30 cents for reefer and 49 cents for flatbed.

“When rates rise this quickly as volumes fall, it indicates that available capacity is exerting greater influence on pricing,” Croke said.

FTR also reported some seasonal softening in July spot rates, even as fuel prices moved higher. Vise noted that the market dynamic was considerably different from what the industry experienced in March.

Even if spot rates have already reached or are approaching a near-term peak, FTR expects contract rates to continue increasing well into 2027. That outlook could provide carriers with greater visibility when negotiating longer-term contracts and planning fleet investments.

What's Constraining Trucking Capacity?

ACT Research also identifies capacity constraints as one of the most important forces supporting the trucking market.

According to ACT’s latest North American Commercial Vehicle Outlook, the current tightening cycle was initially driven by a significant contraction in driver supply following several years of excess trucking capacity.

The industry has also faced additional pressure from stricter regulatory enforcement, including greater scrutiny of electronic logging devices and hours-of-service compliance. New carrier registration requirements and legal developments affecting broker liability are adding further complexity to the operating environment.

These changes can reduce the number of trucks effectively available to the market, particularly among smaller or financially weaker carriers that may struggle to absorb higher compliance and operating costs.

At the same time, ACT sees improvement in several freight-demand fundamentals, including a recovery in U.S. manufacturing and continued construction of data centers, utilities, and other major infrastructure projects.

Together, these factors could create a market in which capacity remains constrained even before freight demand returns to stronger historical levels.

New Truck Orders Boost Backlog

Improving freight rates are also beginning to support renewed demand for new tractors, following several challenging years for carrier profitability.

“Underlining the robustness of the current demand environment has been the backlog-boosting surge in tractor orders that began last December,” said Ken Vieth, ACT president and senior analyst.

In August 2025, tractor order backlogs had fallen to a nearly 13-year low, according to Vieth. By the end of June 2026, however, backlogs had more than doubled compared with year-ago levels.

The recovery in orders is an important signal for the equipment market. Stronger freight rates can improve carrier cash flow, increase confidence in fleet replacement decisions, and make it easier for operators to justify investments in newer, more efficient equipment.

Even with the improvement, however, tractor sales remained below replacement levels during the first half of 2026, as manufacturers and suppliers continued working to restore and expand production capacity.

“The rebound in tractor demand follows the four-year drop in profitability that culminated in generationally low carrier profit margins in 2025,” Vieth said.

The improvement in orders therefore represents more than a short-term increase in equipment demand. It may also signal that carriers are gradually moving from a period of survival and cost control toward fleet renewal and growth.

Capacity Constraints Could Persist

Higher freight rates and improved driver compensation should eventually help address some of the industry's supply challenges. Better margins can encourage drivers to remain in the industry, attract new entrants, and give carriers more flexibility to replace aging equipment.

However, those changes are unlikely to happen overnight.

ACT does not expect the current capacity pressures to disappear quickly.

“Many of the capacity constraints will persist and worsen,” Vieth said, describing the industry's supply-side challenges as “extraordinary as we move further into this new upcycle.”

That assessment is broadly consistent with FTR’s outlook. Although freight demand remains less than robust, the trucking industry currently has little indication that a significant amount of new capacity will enter the market in the near term.

For carriers, that could mean stronger pricing power, improving margins, and more favorable market conditions ahead. For shippers and brokers, however, continued capacity constraints could translate into higher transportation costs and greater difficulty securing trucks when demand spikes.

The key takeaway is that the trucking market is entering an unusual phase: freight volumes do not need to surge for rates to rise. As long as available capacity remains constrained, the balance between trucks and freight can continue to support stronger pricing, potentially making capacity, rather than demand, the defining force in the next stage of the freight cycle.