Trucking Industry Forecast: 2025 In Review

Trucking Industry Outlook: 2025 in Review

Year-End Summary | January 2026

Executive Takeaway

The trucking industry exits 2025 after one of the longest, most difficult downcycles in recent history. What began as a post-pandemic normalization evolved into a prolonged period of weak freight demand, elevated operating costs, tariff-driven uncertainty, and sustained margin compression. While brief disruptions—most notably pre-tariff shipping and winter weather—created episodic rate volatility, they failed to produce lasting improvement. By year-end, the defining theme of 2025 was not recovery, but defensive adaptation, as fleets, OEMs, and shippers adjusted to a market still working through excess capacity.

At the same time, 2025 marked an important turning point beneath the surface: structural capacity contraction is underway. That process is expected to intensify in 2026, laying the groundwork for a more durable recovery—but only after additional friction from policy, tariffs, and soft demand.

Macroeconomic Backdrop: Cooling, Not Collapsing

The U.S. economy entered the final weeks of 2025 with positive but clearly slowing momentum. Hiring decelerated, wage growth flattened, manufacturing remained in contraction, and housing activity stayed under pressure due to affordability constraints. Consumer spending held up better than expected, but increasingly relied on higher-income households, while goods-oriented demand softened meaningfully.

Inflation eased from earlier peaks but remained above the Federal Reserve’s target, with tariffs reintroducing cost pressure into goods categories late in the year. Freight-intensive sectors—including manufacturing, housing, and retail goods—lagged the broader economy, reinforcing headwinds for trucking.

Imports and intermodal volumes weakened further as pre-tariff pull-forward activity unwound. ACT Research noted that while parts of the holiday season surprised modestly to the upside, underlying goods demand remained fragile heading into 2026.

From a policy standpoint, §232 heavy-vehicle tariffs became a permanent fixture of the cost structure in 2025, materially raising truck and trailer prices—particularly for Mexico-sourced equipment. While the Supreme Court may rule on IEEPA tariffs in 2026, §232 tariffs sit outside that process and will continue to pressure equipment affordability regardless of the outcome.

Freight Markets: Soft Demand, Episodic Volatility

Freight Demand Moderation

Freight volumes remained subdued through most of the year, with any mid-2025 strength tied to pre-tariff pull-forward activity that later reversed. By Q4, seasonal slowing combined with soft industrial, consumer, and cross-border flows to keep demand under pressure.

Private fleets continued to gain share, supported by stable service models and higher driver pay, while for-hire carriers remained stuck at recession-level margins. Competitive intensity remained high, particularly in dry van and general merchandise freight.

Spot Rate Volatility Without Follow-Through

Spot truckload rates experienced sharp but short-lived spikes—most notably during December winter storms that disrupted Midwest networks during a seasonally tight window. Load rejections increased and routing guides tightened briefly, but ACT emphasized that these moves were event-driven, not structural.

Despite volatility, spot rates finished 2025 well below historical seasonal norms. A sustained rate recovery remains dependent on continued capacity contraction and a gradual improvement in freight demand—dynamics expected to unfold over 2026 rather than immediately.

Capacity: Contraction Begins, But Balance Remains Elusive

The most consequential development of 2025 was the acceleration of capacity tightening. Weak profitability, elevated costs, and sharply reduced Class 8 production drove a steady contraction in the highway tractor fleet, a trend expected to intensify in 2026.

That said, capacity still exceeded freight demand at year-end. Used truck prices softened again, reflecting lingering oversupply and payback from earlier pull-forward activity. OEM production discipline helped stabilize tractor inventories, but vocational inventories remained elevated and slow to correct.

ACT’s assessment: capacity contraction is real—but incomplete, prolonging the rebalancing process into 2026.

Equipment Markets: Defensive and Replacement-Only

Class 8 Trucks

Class 8 demand remained deeply challenged throughout 2025. November net orders of roughly 19,500 units came in well below seasonal norms, underscoring fleet reluctance to commit capital amid weak margins, higher prices, and regulatory uncertainty.

OEM backlogs stabilized primarily due to production cuts rather than improving demand, and backlog-to-build ratios remained historically low. With §232 tariffs now embedded and EPA 2027 costs looming, fleet purchases remained almost exclusively replacement-driven.

Medium Duty (Classes 5–7)

Medium-duty markets fared little better. Orders improved modestly late in the year but remained below historical norms. Elevated inventories, slowing services activity, and body-builder constraints continued to weigh on the segment, leaving inventories above comfortable levels entering 2026.

Trailers

The trailer market ended 2025 fundamentally weak. Net orders declined again in November, and backlogs remained near historic lows. Dry van and reefer trailers underperformed, while flatbeds showed relative resilience on easier comparisons. Overall BL/BU ratios stayed well below long-term averages, reinforcing cautious OEM production plans.

Regulatory & Cost Pressures: A Persistent Overhang

Tariffs remained the dominant inflationary force in 2025. §232 heavy-vehicle tariffs materially increased equipment prices, compounding elevated insurance, financing, and operating costs. These pressures constrained fleet capital budgets and extended trade cycles.

Regulatory clarity around EPA’s 2027 low-NOx rule improved modestly late in the year, with indications that warranty extensions may be revised or removed. While this reduced some uncertainty, higher equipment prices in 2027 now appear unavoidable. Prebuy activity remains a risk—but one constrained by weak balance sheets and limited access to capital.

Labor markets, meanwhile, remained balanced. Softer freight volumes eased hiring pressure, while private fleets continued to attract drivers. ACT expects capacity tightening—not labor scarcity—to be the primary driver of the next cycle.

2025: The Bottoming Phase

The trucking industry exits 2025 bruised but not broken. The year was defined by weak freight demand, elevated costs, tariff-driven uncertainty, and prolonged margin pressure. Temporary volume and rate distortions from pre-tariff activity and weather events proved fleeting, leaving fleets focused on survival rather than growth.

Importantly, 2025 also marked the beginning of a structural capacity reset. That process is set to deepen in 2026, gradually improving the supply-demand balance. However, recovery will not be immediate. The next upcycle will depend less on a demand surge and more on continued capacity contraction, policy clarity, and improving carrier profitability.

In short, 2025 closed the door on excess optimism—but opened the path toward a more durable, if delayed, recovery.