According to Supply Chain Dive, the trucking market is now in year three of an unusually long downward freight cycle, with carriers implementing lessons from past downturns to prioritize profitability. The TD Cowen/AFS Freight Index released October 15 shows the truckload market reversed year-over-year declines with a 1.5% increase in Q3, while less-than-truckload carriers continue focusing on cost per shipment over volumes to maintain price stability. LTL cost per shipment decreased 0.7% year-over-year in Q3 despite weight dropping 7.4%, indicating successful yield management strategies that have kept costs elevated for nine straight quarters since Q2 2023. Industry leaders emphasize this yield-over-volume approach has proven successful in previous cycles, even amid negative indicators like September’s Purchasing Managers’ Index of 49.1% suggesting manufacturing stagnation. This strategic shift reflects deeper structural changes in the freight industry.
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The Evolution of Carrier Survival Tactics
The current yield-focused strategy represents a maturation of carrier business models that contrasts sharply with previous downturn responses. Historically, trucking companies would engage in destructive price wars during soft markets, sacrificing margins to maintain volume and market share. This approach often led to widespread bankruptcies and industry consolidation. The current discipline around yield management suggests carriers have learned from past cycles and are implementing more sophisticated revenue management techniques similar to those used in airlines and hospitality industries. This evolution is particularly notable in the LTL sector, where network density and operational efficiency create natural advantages for yield optimization compared to the more fragmented truckload market.
The Capacity Management Challenge
Truckload carriers face a fundamentally different set of challenges than their LTL counterparts in this downturn. The truckload market’s excess capacity issue stems from several factors, including relatively low barriers to entry during the 2021-2022 freight boom and the delayed impact of equipment orders placed during peak demand periods. Unlike LTL carriers who operate fixed networks, truckload providers must contend with significant empty miles and positioning costs that make yield management more complex. The projected modest 0.1% quarter-over-quarter increase for Q4 2025, as indicated in the TD Cowen/AFS Freight Index, suggests the capacity imbalance will persist well into 2025, testing carrier resilience and financial reserves.
Broader Economic Pressures
The manufacturing stagnation reflected in the September PMI reading of 49.1% creates headwinds that extend beyond typical seasonal patterns. The manufacturing sector’s continued weakness combines with shifting consumer spending patterns to create a particularly challenging environment for freight demand. While the recent quarter-point rate cut by the Federal Reserve provides some relief, as noted in financial coverage, monetary policy changes typically take 12-18 months to fully impact freight volumes. This timing mismatch means carriers must navigate the current softness without expecting immediate demand stimulation from broader economic policy measures.
Technology’s Role in Resilience
Carriers surviving this extended downturn are increasingly leveraging technology to optimize operations in ways that weren’t available during previous cycles. Advanced logistics platforms, dynamic pricing algorithms, and real-time visibility tools enable more sophisticated capacity management and customer segmentation. These technological advancements allow carriers to identify and protect profitable lanes while making data-driven decisions about which business to decline. The ability to maintain elevated cost-per-shipment levels for nine consecutive quarters suggests carriers are successfully using these tools to resist the temptation of volume-chasing that would undermine pricing discipline.
Industry Outlook and Consolidation Pressures
The projected timeline for recovery—with truckload rates not expected to meaningfully improve until Q4 2025—suggests we’re approaching a critical inflection point for carrier viability. Many smaller operators entered this downturn with weakened balance sheets following the inflationary pressures of 2022-2023, including elevated fuel, equipment, and labor costs. The extended nature of this freight recession, now entering its third year, will likely accelerate industry consolidation as financially stressed carriers seek mergers or exit the market entirely. This consolidation could ultimately benefit surviving carriers by reducing overall capacity, but the transition period will test the entire road transport ecosystem’s resilience.
