In May 2025, the American Trucking Associations (ATA) reported a 0.1% decline in its seasonally adjusted For-Hire Truck Tonnage Index. While seemingly modest, this decrease continues a concerning trend: year-over-year tonnage dropped 1.4%, marking the twelfth straight month of annual declines. As the freight market navigates a prolonged period of softness, it’s worth asking—what does this downturn signal for trucking companies, shippers, and the broader economy?
The ATA’s Chief Economist Bob Costello noted that while tonnage was “essentially unchanged” from April to May, the bigger picture remains that freight volumes are still in decline. “For-hire contract freight remains in a recession,” Costello said, adding that tonnage is down 1.3% through the first five months of 2025 compared to the same period in 2024. This isn’t just a statistical dip, it could be a harbinger of deeper structural shifts in the freight industry. Suddenly advances in technology are being discussed less frequently versus businesses trying to pinpoint where the market, and indeed the economy is heading.
Are We Seeing a Freight Recession, Market Reset or more simply Market Confusion?
Some in the industry are now asking whether this extended period of decline reflects a cyclical freight recession or the beginning of a more fundamental market reset. The surge in capacity post-pandemic combined with a slowdown in consumer spending and tighter inventory management may be creating long-term consequences for freight demand. As retailers and manufacturers recalibrate their logistics strategies, is there a new normal for tonnage levels? At TEC we think, based on speaking to customers, business and demand are relatively healthy but a deep fog of uncertainty is flooding the market in general.
What About the Role of Spot Market vs. Contract Freight?
Another dynamic worth examining is the distinction between the spot market and contract freight. While the ATA’s tonnage index is heavily weighted toward contract freight, the spot market has been even more volatile over the past year. Smaller carriers, particularly those reliant on spot rates, have felt the pinch more acutely than large for-hire fleets. Could this environment lead to more consolidation across the trucking sector as margins tighten?
Will This Impact Driver Demand and Equipment Orders?
A softer freight environment also raises questions about capacity planning. Will carriers slow down truck and trailer purchases in the second half of 2025? What effect might this have on driver recruitment and retention, especially with driver wages having surged in recent years to attract talent? If freight volumes remain low, we may see a shift toward optimization over expansion. Capacity at this time in the expedite market seems healthy whereas summer can usually see it contract to some extent.
How Should Shippers Adapt?
Shippers may find opportunity in this cooling market at times. Linehaul rates seem to be easing. With more capacity available, contract rates could remain competitive for the foreseeable future. But will this lead to a temporary benefit or long-term savings? Logistics managers need to weigh whether this is the time to renegotiate contracts or invest in new regional and last-mile delivery models. We are seeing rates hold steady with moderate decreases for long-distance ground expedites.
What Lies Ahead?
The next few months will be critical for understanding where the freight economy is heading. Will the back half of 2025 bring a rebound, especially with hopes pinned on the holiday shipping season? Or are we in for a prolonged plateau, as inflation, interest rates, and inventory adjustments continue to weigh on freight activity? As the industry navigates these uncertainties, it’s vital to ask tough questions and monitor the signals. From carrier networks and capacity strategy to procurement and pricing models, every stakeholder in the supply chain must stay agile and informed.