After more than three years of depressed freight rates, excess capacity, and razor-thin margins, the trucking industry is cautiously asking a question it’s been afraid to voice: is the freight recession finally ending? November 2025 brings a complex mix of signals—some encouraging, others sobering—that suggest the market may be at an inflection point. Spot rates have stopped their free fall and are showing tentative signs of recovery in certain lanes. Capacity continues to exit the market as struggling carriers fold or park trucks. Manufacturing data sends mixed messages, with some regions showing strength and others contracting. And shippers, after years of enjoying buyer’s market conditions, are beginning to feel the first hints of tightening capacity. Yet declaring victory over the longest freight downturn in modern history would be premature. The recovery, if it comes, will likely be gradual, uneven, and vulnerable to disruption. For Luna Logistics and our clients, the challenge is to read the signs correctly, position strategically, and prepare for what might be a slow but meaningful turn in the market cycle.
The long road to the bottom: context on the downturn
To understand where we are now, it helps to revisit how we got here. The freight market’s current malaise began in mid-2022, following the frenzied boom of 2020-21. During the pandemic, freight demand exploded as e-commerce surged, supply chains scrambled to keep pace, and spot rates skyrocketed to record highs—dry van rates peaked near $3.00 per mile or more in some lanes. That boom prompted a wave of new entrants: individuals and small fleets rushed into trucking, attracted by high rates and the promise of easy profits. Truck manufacturers ramped up production, and by late 2021, the industry was adding capacity at a breakneck pace.
Then reality set in. Consumer spending shifted back from goods to services as the economy reopened. Retailers, which had over-ordered inventory during the pandemic, found themselves with bloated warehouses and pulled back on freight orders. Manufacturing slowed, port volumes dipped, and industrial production stagnated. Interest rates rose sharply as the Federal Reserve fought inflation, dampening construction and big-ticket consumer purchases. By the second half of 2022, freight volumes had turned negative year-over-year, and spot rates began their long descent. National dry van spot rates averaged roughly $1.95–$2.05 per mile in early 2025—down over 70 cents from the 2021 peak.
For 13 consecutive quarters, the industry has endured weak demand, low rates, and elevated operating costs. Diesel fuel, though off its 2022 highs, still hovers around $3.70+ per gallon nationally. Insurance premiums have surged 40-50% for many carriers. Equipment costs remain elevated. The combination of low revenue and high expenses has crushed margins, particularly for small carriers and owner-operators. Carrier bankruptcies have accelerated throughout 2025, with failure rates exceeding any prior year of the downturn. Thousands of trucking companies have ceased operations, parked trucks, or exited the industry altogether.
Yet even as supply slowly contracted, demand remained tepid. The hoped-for freight rebound kept getting pushed further into the future. First it was supposed to be late 2023, then mid-2024, then late 2024, and now analysts are saying late 2025 or early 2026. The persistence of the downturn—its grinding, seemingly endless duration—is what earned it the moniker “the Great Freight Recession.” Unlike a sharp crash followed by a rapid recovery, this has been a slow bleed, testing the patience and financial resilience of everyone in the industry.
November 2025: conflicting signals and cautious optimism
As we move through the fourth quarter of 2025, the market is sending mixed but increasingly interesting signals. On the positive side, spot rates have stabilized and are even ticking upward in some lanes. According to DAT and FTR data, spot rates rose modestly in early November, with dry van spot linehaul up roughly 3% year-over-year, reefer up 5%, and flatbed up 4%. This is the first sustained year-over-year increase in spot rates in many months, suggesting that the market may have finally found a floor. Some regional lanes are seeing even stronger recovery: certain central Northeast routes, for example, are reportedly running 12% higher than a year ago. These gains, while modest, break a long pattern of declining or flat pricing.
Contract rates, which typically lag spot market movements, have been stuck around $2.42 per mile for months. However, the spread between contract and spot has narrowed significantly—from 52 cents earlier in 2025 to just 35 cents now. This convergence is unusual and signals that carriers are getting more selective about the freight they accept. In a normal downturn, weak demand leads to overcapacity, and spot rates collapse relative to contract rates as carriers scramble for any available freight. But 2025 hasn’t followed the normal script. Despite soft volumes, spot rates have held up better than expected because carriers—having endured years of financial pain—are increasingly unwilling to haul freight below their operating costs. The average carrier needs about $1.80 per mile just to break even, yet current spot rates in some lanes are around $1.69 per mile. Rather than accept money-losing loads, carriers are simply rejecting them. This discipline, born of desperation, has created a de facto rate floor.
Tender rejection rates—a key indicator of capacity tightness—have climbed to their highest levels since early 2022. When carriers reject tendered loads, it forces shippers to the spot market and signals that available capacity is shrinking. The uptick in rejections through late 2025 suggests that the market is more balanced than it was a year ago, even if overall demand remains subdued. Some of this is due to geographic mismatches: trucks are in the wrong places when freight pops up in tightening lanes. But part of it is genuine capacity discipline. Carriers that survived the downturn are leaner, more selective, and more aware of their true operating costs. They’re not willing to chase volume at any price.
On the demand side, the picture is murkier. October manufacturing data was a Rorschach test, with the New York Fed index surging to +10.7 and the Philadelphia Fed index plummeting to -12.8—a 24-point divergence between two major regions. National surveys paint an equally confusing narrative: the ISM Manufacturing PMI shows contraction (48.7, marking the eighth straight month below 50), while the S&P Global PMI shows expansion (52.5, the third straight month above 50). How can both be true? The answer lies in inventory dynamics. Inventory growth hit an 18-year high, meaning goods are being produced, but they’re not being sold and distributed downstream. Freight is moving from factories into warehouses, where it sits rather than flowing through the normal three-stage supply chain (factory → distribution center → retail). This creates a “freight air pocket”—shipments aren’t cascading through the network, so volumes appear artificially low even though stuff is being made.
This inventory overhang is a critical factor. When retailers and distributors finally begin drawing down those inventories and restocking in anticipation of renewed consumer demand, freight volumes should spike. The question is: when will that happen? Some analysts believe it could begin as early as Q1 or Q2 2026, driven by Federal Reserve rate cuts (which have begun), improved consumer confidence, and pent-up demand in sectors like housing and construction. Others are more cautious, noting that geopolitical risks, tariff uncertainty, and macroeconomic headwinds could delay the recovery further.
Capacity continues to shrink: the supply side tightens
While demand uncertainty persists, the supply side of the equation is becoming clearer: trucking capacity is contracting. ACT Research reported that tractor builds fell 32% from the first half of 2025 to the second half, dropping below replacement levels. The industry is no longer adding trucks—it’s actually shrinking the active fleet. Heavy-duty manufacturers cut output sharply in response to weak order intake, and dealer inventories, though still elevated from the pandemic era, are gradually normalizing. Used truck sales remain active as fleets right-size, but pricing in the resale market continues to reflect saturation. Older equipment is being retired, and many small carriers that bought trucks during the 2021-22 boom at inflated prices now face negative equity or unaffordable replacement costs.
Carrier failures are the most visible sign of capacity attrition. Thousands of trucking companies have exited the market over the past three years, unable to sustain operations at current rate levels. The churn has been particularly severe among small fleets and owner-operators, who lack the financial cushion to weather extended downturns. Larger, well-capitalized carriers have also felt the squeeze—operating margins at even the best-in-class fleets are at “generational lows,” forcing them to dial down equipment investment and reduce their active truck counts. Industry data shows that capacity continues to contract as carrier bankruptcies mount, and there’s little sign of new entrants rushing in to fill the void. The barriers to entry are now higher than at any time in the deregulation era: operating costs are up nearly 20% for new carriers compared to established operators, driven by higher insurance premiums and financing costs associated with the inflated used truck market of 2021-22.
This capacity discipline is critical to understanding why spot rates have stopped falling. In a normal market, excess capacity persists until demand recovers enough to absorb it. But the Great Freight Recession has been long enough—and painful enough—that capacity is finally exiting faster than demand is declining. The result is a slow, grinding rebalancing. When freight demand does return, there won’t be an ocean of idle trucks waiting to handle it. Instead, the industry will face a capacity-constrained environment, with tight truck availability, higher spot rates, and increased pricing power for carriers. The transition from oversupply to balance won’t happen overnight, but the groundwork is being laid.
The role of external factors: tariffs, regulations, and labor
Several external factors are accelerating the capacity squeeze and adding complexity to the recovery outlook. The Section 232 tariffs on imported trucks and parts, effective November 1st, make new equipment purchases significantly more expensive, discouraging fleet investment and extending equipment lifecycles. This reduces the pace at which new capacity can be added to the market, even if demand improves. Similarly, English language proficiency enforcement, which began in June 2025, is sidelining drivers who cannot meet the standard, effectively tightening the labor pool. The combination of these policies—equipment tariffs and driver qualification crackdowns—creates a “triple lock” on capacity growth: labor constraints, capital constraints, and profitability constraints all work against rapid capacity expansion.
The labor market is particularly concerning. Jobless claims remain flat around 219,000, right in line with prior years, and unemployment is forecast to hover around 4.5% into 2026. However, job openings are down, hiring has slowed, and young workers are struggling to get into the workforce. For trucking, this means that when demand returns and carriers need to recruit drivers, that hiring muscle has atrophied. Training schools are graduating fewer drivers, and fewer people are entering the profession. The chronic driver shortage, estimated at 60,000-80,000 drivers before the English proficiency crackdown, is likely to worsen. Even if carriers wanted to add trucks and expand fleets, finding qualified drivers to operate them will be a major challenge.
Tariffs also introduce uncertainty into the broader economy. The Trump administration has pursued an aggressive tariff agenda in 2025, with universal tariffs on many imported goods and country-specific reciprocal tariffs targeting major trading partners. These policies have disrupted supply chains, caused importers to front-load shipments earlier in the year (creating temporary freight surges followed by air pockets), and raised costs across the economy. Ports saw import volumes surge in late winter and spring 2025 as shippers rushed to beat tariff deadlines, but by fall, import volumes had dropped sharply. This stop-and-go pattern makes it hard to plan capacity and forecast demand. The risk of further tariff escalations or trade retaliation adds another layer of unpredictability.
What the data is telling us: early indicators of recovery
Despite all the headwinds and mixed signals, there are genuine indicators that suggest the market is turning. Spot volumes, though down 16-18% year-over-year, have stabilized after months of decline. The rate of decrease is slowing, and some weeks have shown modest volume increases. Transportation utilization, as measured by the Logistics Managers’ Index, hit a low of 50.0 in September (right on the fence between growth and contraction), but jumped to 57.3 in October. This late-month surge, though compressed, signals that freight is starting to move again after a sluggish early fall.
C.H. Robinson, one of the largest freight brokers in North America, recently revised its forecasts for 2026, predicting that truckload spot rates will climb and that capacity will tighten further. While volumes remain soft in the near term, the combination of capacity exits and improved economic conditions (interest rate cuts, infrastructure spending, potential inventory restocking) is expected to drive rates higher by late 2025 and into 2026. Industry analysts now project that by the fourth quarter of 2025, spot rates will have recovered to levels that restore profitability for efficient carriers and begin to close the gap with contract rates. The pace of rebound will depend on continued discipline in capacity management and the resilience of freight demand, but the direction appears set.
It’s also worth noting what’s changed about the freight cycle. This recovery is unlikely to look like the explosive 2020-21 boom. Instead, analysts expect a more measured, gradual recovery—similar to the 2013-2017 upcycle rather than the rollercoaster of 2018-2022. Capacity has been wrung out of the system, so when demand returns, rates should firm up relatively quickly. But the structural issues—driver shortages, high equipment costs, regulatory complexity—will limit how fast capacity can be added back. This means the recovery could be steady and sustainable rather than speculative and volatile. For carriers, that’s actually good news: sustainable rate improvement is better than a boom-bust whipsaw. For shippers, it means planning for gradually rising costs rather than sudden spikes.
Geographic and modal variations: not all markets are created equal
One of the complicating factors in reading the recovery is that the freight market is not monolithic. Some regions and lanes are seeing capacity tighten and rates rise, while others remain soft. The 24-point divergence between the New York and Philadelphia Fed manufacturing indices is a perfect illustration: one city’s boom is another city’s bust. Freight networks don’t always align with these regional imbalances, leading to trucks being in the wrong places when loads suddenly appear. This causes rejection rates to rise and spot rates to spike in certain lanes, even as overall national volumes remain weak.
West Coast ports, which handle a large share of U.S. container imports, have been a particular focal point. After the front-loaded import surge earlier in 2025, inbound volumes tailed off sharply by fall, leaving drayage and inland trucking capacity underutilized in Southern California and the Pacific Northwest. Meanwhile, interior markets and border corridors (especially the Southwest, given the CDL and English proficiency enforcement impacts) are seeing pockets of tightness. Savvy brokers are leveraging these geographic imbalances by repositioning equipment from soft markets to tight ones, but this requires sophisticated planning and strong carrier relationships.
Modally, there are also differences. LTL carriers are raising rates by mid-single digits, even as volumes remain soft, benefiting from the elimination of Yellow Freight (a major LTL carrier that collapsed in 2023) and reduced competitive pressure. Companies like XPO, Old Dominion, and Saia are holding the line on pricing and have stated they will continue to prioritize profitability over volume. In contrast, truckload carriers face deeper pricing pressure, though spot rates are finally showing some upward movement. Flatbed and refrigerated segments are experiencing their own dynamics: flatbed is tied to construction and industrial activity (which has been mixed), while reefer follows agricultural cycles and seasonal demand (which drove some strength in late 2025).
Intermodal rail, long seen as a lower-cost alternative to truck, has also struggled with soft volumes but is positioning for recovery. Infrastructure spending under the Infrastructure Investment and Jobs Act is expected to boost intermodal activity as projects ramp up and materials move. However, intermodal has its own capacity constraints, including chassis shortages and terminal congestion. Shippers considering intermodal as a hedge against truck capacity tightness should start engaging with rail providers now, as lead times and equipment availability can be limiting factors when demand picks up.
The psychological element: confidence and expectations
Beyond the hard data, there’s a psychological element to market recovery that’s worth considering. The freight industry has been beaten down for so long that optimism feels almost foreign. Carriers have heard predictions of recovery every quarter for three years, only to see the rebound perpetually pushed out. This “cry wolf” dynamic has made the industry cautious, even skeptical, about any green shoots. Yet that caution is itself a factor that could support a sustainable recovery. Unlike the speculative frenzy of 2021, when everyone rushed in expecting easy money, the current environment is marked by realism and discipline. Carriers aren’t over-ordering equipment. Brokers aren’t overpromising capacity. Shippers aren’t assuming low rates will last forever.
As one freight analyst put it, the market feels “a lot like showing up way too early for Thanksgiving dinner. All the ingredients are there, but no one has started cooking yet.” The underperformers are leaving. Capacity is tighter, slower, and more selective. Tariffs, regulations, and labor constraints are creating structural barriers to rapid capacity expansion. When demand comes back—whether that’s Q2 or Q4 of 2026—supply won’t be ready for it. That’s when the real shift happens: rates rise meaningfully, carriers regain pricing power, and the cycle turns decisively in favor of transportation providers.
For Luna Logistics and our clients, the key is to recognize that we may be in the early innings of that shift, even if it doesn’t feel dramatic yet. The market doesn’t ring a bell at the bottom. Recovery happens gradually, in fits and starts, with setbacks and volatility along the way. The carriers and brokers who position early—by maintaining strong relationships, staying informed, and planning proactively—will be the ones who benefit most when the recovery gains momentum.
Preparing for the upturn: actionable strategies
So what should carriers, shippers, and brokers be doing now to prepare for a potential recovery?
For carriers:
- Preserve capital and manage cash flow carefully. The recovery is likely to be gradual, so avoid over-leveraging or making big bets on a sudden freight surge. Focus on financial resilience and operational efficiency.
- Maintain your best equipment and drivers. When demand returns, those who have retained quality assets and personnel will be able to scale up more quickly and command premium rates.
- Be selective about freight. Continue to reject loads that don’t cover your costs. Discipline in pricing now builds the foundation for sustainable margins later.
- Monitor lanes and regions closely. Recovery won’t be uniform. Position your trucks in markets where demand is firming and rates are improving. Use data and market intelligence to stay ahead of shifts.
For shippers:
- Lock in contract capacity where possible. If you can negotiate multi-year or long-term contracts now, before the market fully turns, you may secure favorable rates that protect you from future increases.
- Diversify your carrier base and modal mix. Don’t rely solely on one carrier or one mode. Build relationships with multiple providers, including intermodal and LTL, to ensure you have options when truckload capacity tightens.
- Budget for rate increases. The days of rock-bottom freight rates are ending. Plan for higher transportation costs in 2026 and adjust your product pricing or supply chain strategies accordingly.
- Engage your broker or logistics partner early. When you see signs of demand picking up in your business, communicate that to your transportation providers. Early engagement helps them allocate capacity to you rather than to competitors.
For brokers and 3PLs:
- Educate your clients on market dynamics. Help shippers understand why rates are likely to rise and what’s driving capacity tightness. Positioning yourself as a strategic advisor builds trust and long-term value.
- Strengthen carrier relationships. In a tightening market, brokers who have treated carriers fairly, paid promptly, and communicated transparently will have better access to capacity. Invest in those relationships now.
- Adjust forecasting and pricing models. Historical rate data from the downturn won’t fully capture the recovery dynamics. Update your models to reflect capacity constraints, equipment cost increases, and regulatory impacts.
- Stay agile and opportunistic. The recovery will create pockets of opportunity—certain lanes, regions, or modes may tighten faster than others. Brokers who can identify and capitalize on these shifts will outperform.
Conclusion: the light at the end of the tunnel (or is it an oncoming train?)
Is the freight recession ending? The honest answer is: maybe. The indicators are mixed, the timeline is uncertain, and the risks are real. But the balance of evidence suggests that the market has finally found a floor and is beginning to stabilize. Spot rates have stopped falling. Capacity is contracting. Tender rejection rates are rising. External factors—tariffs, regulations, labor constraints—are tightening supply. And demand, while still soft, is showing glimmers of improvement as inventory dynamics shift and economic conditions gradually improve.
The recovery, if it comes, won’t be a V-shaped rebound. It will be a slow, uneven climb, with setbacks and surprises along the way. Some lanes will tighten before others. Some carriers will benefit while others continue to struggle. And shippers will face the difficult adjustment from a buyer’s market to a more balanced or even carrier-favored environment.
For Luna Logistics, the lesson is clear: prepare now, stay informed, and position strategically. The freight market has been waiting for this moment for three long years. Whether the inflection point is here or still a few quarters away, the direction is increasingly clear. Capacity is tighter. Costs are higher. And when demand returns, the industry won’t have the slack it once did to absorb it painlessly. Those who recognize this reality and plan accordingly will thrive. Those who don’t may find themselves scrambling for capacity and paying premium rates when they least expect it.
The Great Freight Recession has tested the industry’s resilience like no downturn in modern memory. But downturns, no matter how long, eventually end. The seeds of recovery are being planted in November 2025. Now we wait to see when—and how—they bloom.