Navigating the "Great Freight Recession": A Look at U.S. Trucking in July & The Road Ahead for August 2025
The U.S. trucking industry has been in a prolonged downturn, often dubbed the "Great Freight Recession," marked by persistent overcapacity and soft freight demand. As of July 2025, this imbalance had stretched for approximately three years, double its typical duration. While recovery was initially hoped for in 2025, expectations have largely shifted to 2026, primarily due to the complex interplay of shifting trade policies and new tariffs.
July 2025: A Month of Headwinds and Hidden Dynamics
July continued to reflect a challenging period for the trucking sector.
Dampened Demand & Tariff Impact: Freight demand remained soft, and the industry experienced its fourth consecutive month of declining volumes in June. Proposed U.S. tariffs, including a 20% increase on international goods and up to 100% on Chinese exports, led to a temporary "frontloading" of shipments earlier in the year. This created an artificial surge in dry van rates, but it was not indicative of a true market acceleration and is expected to lead to subsequent destocking, further complicating stability. Universal Logistics, for instance, reported a direct decline in revenue due to lower volumes influenced by these tariffs.
Financial Strain and Bankruptcies: The month was notable for several trucking company bankruptcies, signaling ongoing financial distress for carriers, especially smaller operations. Carroll Fulmer Logistics, a Florida-based company with a 70-year history, ceased operations in July, leading to approximately 600 job losses and citing the "Great Freight Recession" as a key reason. Three other freight companies—Elma Transport, MG Logistics, and NV Freight—also filed for bankruptcy in Q2/July. This highlights a bifurcated market, where smaller, less diversified carriers are disproportionately impacted.
A Surprising Job Increase: Despite overall volume declines and bankruptcies, truck transportation jobs surprisingly saw a slight increase of 3,600 in July, reaching 1,523,300, which was 6,600 jobs more than a year prior. This counter-trend suggests a reallocation of labor within the sector, possibly driven by larger, more resilient carriers absorbing drivers from struggling smaller firms.
Rates: An Illusion of Recovery?: While some year-over-year rate increases were observed (e.g., dry van spot rates up +0.5% year-over-year, flatbed spot rates up +1.6% year-over-year), these movements were primarily influenced by temporary factors like pre-tariff inventory building or easier comparisons to a weaker period in the prior year. The underlying market fundamentals of soft demand and persistent overcapacity remain challenged. The Driver Availability Index tightened in June, but this appears to be a sign of capacity exiting the market due to financial strain rather than a surge in demand.
Regulatory Shifts: Regulators showed an inclination towards easing burdens. The Federal Motor Carrier Safety Administration (FMCSA) and National Highway Traffic Safety Administration (NHTSA) withdrew proposals to mandate speed limiting devices on heavy-duty trucks, a move widely welcomed by the industry. Temporary waivers for medical certifications were also granted to mitigate transition delays to a new electronic system.
Technology's Double-Edged Sword: Technology continued its deep integration, with advancements in AI and automation showing promise in enhancing efficiency and safety. AI-driven route optimization, predictive maintenance, and the shift towards electric vehicles are notable trends. However, the substantial upfront investment required for these technologies exacerbates financial woes for smaller carriers, accelerating the market's bifurcation.
August 2025: A Glimmer of Seasonal Hope
August is anticipated to bring signs of stabilization and a moderate recovery, largely driven by predictable seasonal demand.
Seasonal Surges:
Dry Van: Expected to see modest growth (~+0.6% YoY) with spot rates trending upward to $2.15–$2.25 per mile. Demand will be driven by retailers planning for the holiday shopping season and the start of the Midwest harvest. Capacity is expected to tighten, particularly in South Texas and the Southeast.
Reefer: Projected for slight growth (~+0.9% YoY), primarily due to summer produce harvests in regions like Georgia, Texas, and California. Spot rates could average $2.50–$2.60 per mile during peak season.
Flatbed: Projected to remain the strongest performer with robust growth (~+3.1% YoY). Summer is peak season, driven by ongoing construction and infrastructure projects. Spot rates could exceed $2.75 per mile nationally, with premium lanes potentially crossing $3.00. Capacity is expected to remain extremely tight in the Southeast, Texas, and the South Central U.S..
Labor Day Impact: The Labor Day holiday (August 29-September 1) will introduce a predictable capacity crunch and higher rates towards the end of the month as drivers take time off.
Cautious Optimism: It's crucial to understand that this anticipated improvement is primarily a seasonal phenomenon, not necessarily a sign of a fundamental, sustained rebound in underlying economic demand. The market remains fragile, and the long-term outlook for a full recovery is still tied to broader economic conditions.
Strategic Imperatives for the Road Ahead
To navigate this evolving landscape, stakeholders must adopt proactive strategies.
For Shippers:
Optimize Procurement: Consider locking in low contract rates for the longest possible duration to capitalize on the current depressed rate environment.
**Strengthen Carrier Relationships