U.S. trucking fleets will continue to experience sluggish freight demand into next year and are likely to face significant tariff-related increases in new truck prices, according to FTR Transportation Intelligence. 

Speaking on an Oct. 2 webinar hosted jointly by the Food Shippers of America, FTR Chairman Eric Starks said the U.S. economy is sending mixed signals. Although gross domestic product has been stronger than expected and new home sales are performing well, consumer spending is lackluster and existing home sales have remained depressed.

In looking closer at trucking, there remains “more capacity out there than what freight volumes would justify,” said Avery Vise, FTR’s vice-president of trucking.

Volumes are likely to remain soft over the next several quarters, and while Starks said on the webinar that FTR was not predicting a recession, it remains possible the U.S. economy could move in that direction.

These comments echoed those made by several trucking executives at the recent FTR Transportation Conference. They said they were not seeing signs of a near-term improvement in market conditions, and one went so far as to suggest customers are being challenged now more than they have ever been before.

Truck tariffs could be a ‘breaking point’

Vise said the truck tariffs could prove to be “the breaking point for some trucking operations.” Although some details remain unclear, President Donald Trump in late September announced 25% tariffs on heavy trucks not built in the U.S. 

The price increases, potentially exceeding US$30,000 for new models, could reduce the ability of fleets to expand when freight demand inevitably increases. Some carriers may consider keeping their existing equipment longer, but that could result in more unplanned vehicle maintenance as these aging trucks are forced to run longer.

“It is a difficult situation figuring out what to do in the coming months,” Vise said of the dilemma carriers are facing.

CDL crackdown to cut into trucking’s overcapacity

Looking ahead, Vise said the U.S. government’s crackdown on the ability of non-citizens to obtain a commercial driver’s license could bring trucking capacity into equilibrium faster than previously projected.

The emergency final rule from the U.S. Department of Transportation could remove as many as 194,000 drivers from U.S. highways.  

Vise said FTR had projected overcapacity to remain at least into 2027, providing shippers an edge in rate negotiations. However, the new rule and the growing focus on English-language proficiency among truck drivers have the potential to accelerate that timetable. 

Government shutdown clouds outlook on job market

Starks noted that the U.S. job market remains an ongoing concern. “The last several months have been tremendously weak, and we don’t expect that trend to get better anytime soon,” he said.

Due to the U.S. government shutdown, the monthly unemployment report from the Bureau of Labor Statistics was not released as scheduled on Oct. 3. That makes it more difficult to accurately assess the health of the job market. 

However, ADP Research reported private sector employment shed 32,000 jobs in September, and that private payrolls for August were revised to a loss of 3,000, after data initially showed a gain of 54,000.

“This month’s release further validates what we’ve been seeing in the labor market, that U.S. employers have been cautious with hiring,” Dr. Nela Richardson, chief economist of ADP, said in a statement.