The U.S. trucking industry is facing a complex mix of challenges that could tighten capacity in 2025 and beyond, according to recent insights from FTR Transportation Intelligence. Issues like rising insurance costs, declining truck orders, and new English proficiency regulations are expected to disrupt the supply of available carriers and drivers, particularly among small and mid-size fleets.
Insurance Costs Surge, Threaten Small Carriers
One of the most concerning developments is the sharp increase in commercial auto insurance premiums. According to the Producer Price Index (PPI), insurance costs rose 6.4% year-over-year in May, marking the steepest increase since at least 1998. Without a significant boost in freight rates or volumes, these rising costs could push smaller carriers out of the market, as many lack the financial buffer to absorb them.
“Unless we see a large spike in spot rates or a surge in trade activity, many small fleets may not survive,” said Avery Vise, Vice President of Trucking at FTR.
Freight Rates Remain Weak
Spot and contract rates across freight segments remain largely stagnant. Dry van spot rates are projected to rise just 1.4% in 2025, while refrigerated rates may see a 0.8% decline. Only flatbed rates offer slight optimism with a 2.7% uptick. Additionally, truck loadings—a key measure of freight activity—remain subdued, further complicating revenue prospects for carriers.
Truck Orders Hit a New Low
April 2025 truck orders fell 47% year-over-year, hitting the lowest level since 2020. Fleet operators appear hesitant to invest in new equipment amid market uncertainty, potential tariffs, and pending EPA regulations. While this won’t immediately impact capacity, it could create a shortage of vehicles if demand rebounds in 2026 or 2027.
English Proficiency Rule Could Squeeze Driver Supply
A new FMCSA enforcement policy around English proficiency may also shrink the driver pool. Drivers who cannot demonstrate sufficient English skills may be placed out-of-service, except within border zones. While the numbers affected are not currently large enough to shift the market, broader enforcement could change that dynamic.
Truck Import Tariffs Under Review
The Department of Commerce is reviewing the national security implications of importing medium- and heavy-duty trucks, 40% of which are assembled in Mexico. If tariffs are imposed, truck prices could jump significantly, with projections showing Class 8 trucks rising from $170,000 to $224,000. The American Trucking Associations opposes these tariffs, citing already high operating costs.
Diesel Prices Stay Stable—for Now
On a positive note, diesel prices have remained relatively stable and are at their lowest levels since September 2021, reducing one major cost pressure for fleets. Still, FTR’s data show that carrier population is tightly correlated with spot rate movement. Any major swing in spot rates will likely lead to significant changes in the number of active carriers.
As the industry braces for regulatory and economic shifts, understanding these drivers is critical for fleet operators and logistics professionals seeking to manage risk and remain competitive.
Source:
Leave a Comment