Starting in 2022, the freight recession shook the trucking industry, but what’s the state of the market in 2025? Knowing where we’ve been and where we’re headed helps you make smart decisions for your trucking business. Here’s what you need to know about the freight recession, as well as recovery signs and strategies that will help you stay competitive.
What Is a Freight Recession?
A freight recession happens when demand for shipping services drops significantly while capacity remains high. Unlike general economic recessions that affect all sectors, a freight recession specifically impacts transportation and logistics. Freight volumes drop, spot rates plummet, and carriers face fierce competition for fewer available loads.
The current freight recession began in April 2022, with industry analysts warning of its arrival weeks earlier. Freight shipment volumes remain below historical averages. Key factors driving this downturn include excess carrier capacity since the pandemic boom, low consumer demand, declining spot rates, and persistent inflation pressures.
The freight recession creates a perfect storm: too many trucks chasing too few loads, forcing rates down and squeezing profit margins for carriers across the country.
When Did the Freight Recession Start and Is It Over Now?
Most experts trace the start of the freight recession to April 2022, when shipment volumes began a steep decline. Over the next two years, the downturn became one of the longest and most disruptive in modern trucking history, impacting carriers of all sizes.
It’s been over three years since those initial year-over-year shipment declines, and while the economy has shifted, many truckers have spent the majority of that time operating in recessionary conditions.
Signs of Recovery in 2025
The good news? Market conditions are gradually improving, and carriers are beginning to regain leverage.
- The national Outbound Tender Reject Index (OTRI), a key indicator of carrier bargaining power, rose from 4.3% in early September 2024 to approximately 5.7% by late February 2025, signaling a more balanced dynamic between capacity and demand.
- As of May 2025, OTRI stood at 6.69%, suggesting modest tightening in capacity; another positive sign of a recovering freight market.
Certain dry van and contract markets also boasted modest year-over-year gains in early 2025. Spot markets remain volatile, but some segments show early stabilization signs.
Still, recovery isn’t guaranteed. Global trade tensions, domestic regulatory shifts, and fuel price uncertainty continue to affect freight demand. And while forecasts suggest gradual volume growth in 2025, many analysts believe a full market rebound could stretch into 2026.
How the Freight Recession Impacted Trucking
The freight recession hit the trucking industry hard, creating ripple effects that continue today:
Spot Market Decline
Spot rates fell hard during the freight recession, leaving little room for profit, especially for small carriers who rely heavily on the spot market.
According to NBC News, drivers went from earning about $1 per mile in profit in 2021 to just 3 cents per mile by 2023, while their operating costs remained around 40 cents per mile. With that kind of margin collapse, many truckers were running loads at a loss just to stay in business.
This race to the bottom intensified competition across the industry, making it harder to cover core expenses like fuel, maintenance, and insurance.
Capacity Overcrowding
During the pandemic, the trucking industry saw an unprecedented influx of new carriers. Many drivers rushed to get their own authority while spot rates were high and freight was abundant.
According to TIME, the number of for-hire carriers went from about 241,000 in June 2020 to over 475,000 by July 2023. This 96% increase flooded the market with capacity.
When freight volumes softened and rates fell, many of these new operators found themselves in financial trouble, unable to cover costs in a much more competitive and less profitable environment.
Strained Cashflow
For many carriers, the freight recession did more than just lower rates. It pushed operating margins into negative territory and made cashflow management a daily struggle.
The American Transportation Research Institute (ATRI) report for 2024 found that the average cost to operate a truck reached $2.26 per mile. Non-fuel operating costs alone climbed to $1.78 per mile, marking the highest level ATRI has ever recorded.
In the truckload sector, average operating margins dropped to -2.3%. This means that many carriers were losing money on every mile they drove. Rising costs for equipment, insurance, and driver benefits added even more pressure to an already strained market.
With pandemic-era savings depleted, many owner-operators face cashflow challenges. Covering daily expenses like fuel, maintenance, and payroll has become increasingly difficult, especially for smaller carriers with fewer financial buffers.
4 Strategies to Stay Competitive After the Freight Recession
Smart carriers are adapting their strategies to navigate the challenging market and position themselves for recovery. Here’s how to strengthen your operation:
1. Stay Informed to Make Smarter Freight Decisions
Staying competitive in a recovering market starts with understanding how rates, lanes, and demand are shifting. Load prices can fluctuate day to day, and knowing when and where to take a load can make the difference between profit and a loss.
Use load boards, rate indexes, and market reports to track trends in real time. OTR Solutions considers supporting our clients as one of our top priorities and promises. That’s why we offer a robust Client Portal, personalized service from dedicated account managers, and a network of trusted partners that together help carriers stay informed, make smarter decisions, and avoid risky brokers
The more you understand the market, the better equipped you are to make profitable decisions for your business.
2. Protect Cashflow with Flexible Funding
Invoice factoring remains crucial when recovery is slow and payments stretch longer. True Non-Recourse Factoring from OTR Solutions provides same-day funding on processed invoices, protecting you from non-paying brokers.
OTR now offers fuel credit for factoring customers, giving new and scaling authorities access to fuel without upfront costs. This flexibility helps carriers take profitable loads without tying up operating funds in fuel expenses.
If you are considering switching factoring companies during tough times, make sure your new partner offers the protection and support you need to weather market volatility.
3. Control Fuel Costs
Fuel contributes to a huge portion of operating expenses for over-the-road carriers. Even small savings per gallon add up quickly across your operation.
The OTR Fuel Card delivers average savings of $0.50 per gallon, with discounts up to $2.25 per gallon at 2,500+ in-network locations. Every dollar saved on fuel flows directly to your bottom line during tight margin periods. Consider how much a gallon of diesel weighs and plan fuel stops strategically so you can maximize these savings across your routes.
4. Expand or Diversify Your Operating Area
Some markets rebound faster than others. Rather than waiting for rates to improve in your usual lanes, consider shifting your focus to stronger regions or diversifying into different freight types.
Look at longer-haul opportunities, new shippers, or broader service areas that may offer better-paying loads. Use tools like load boards and rate reports to identify consistent, high-performing lanes.
Flexibility is key. Carriers who are willing to expand their operating footprint often find more opportunities and greater stability, especially when local or familiar markets stay soft. As regulations and market conditions vary by state, staying agile also helps you avoid disruptions and stay compliant on the road.
Lessons from the Freight Recession for Truckers
The freight recession taught valuable lessons about surviving market downturns:
Financial Flexibility Is Critical
Carriers with strong cashflow management and access to financing weathered the storm better than those operating on thin margins. Having backup funding sources and conservative financial planning proved essential.
Diversification Reduces Risk
Truckers who relied on single customers or freight types faced greater challenges when those markets softened. Building a diverse book of business protects against sector-specific downturns.
Strong Relationships Matter
Carriers who maintained good relationships with brokers and shippers had better access to available freight during tough times. Professional service and reliability pay dividends when loads become scarce.
Technology Provides Competitive Advantage
Operators using trucking technology and modern tools for route planning, load matching, and expense management operated more efficiently and maintained better margins throughout the downturn.
Strengthen Your Business with Reliable Freight Factoring
The freight market may be stabilizing, but smart carriers prepare for whatever comes next. True Non-Recourse Factoring provides the financial protection and cashflow you need to operate confidently during recovery and beyond.
Combined with fuel credit access and industry-leading fuel savings, OTR Solutions helps carriers maintain operations and capture opportunities as markets improve. Our integrated approach streamlines both factoring and fuel management, giving you more time to focus on running profitable loads.
Apply today to start building a more resilient, profitable trucking business that’s ready for market recovery.
Freight Recession FAQs
What is a freight recession in trucking?
A freight recession occurs when shipping demand drops significantly while trucking capacity remains high, leading to intense competition for loads and falling freight rates. Unlike general economic recessions, freight recessions specifically impact transportation and logistics sectors.
When did the freight recession start?
The current freight recession began in April 2022, with FreightWaves having declared it imminent in March 2022. What followed became one of the longest freight downturns in trucking history, lasting over two years.
Is the freight recession over in 2025?
Signs point to a gradual recovery, with tender rejection rates rising and spot rates improving compared to 2022-2023 levels. However, trade uncertainties and tariff policies may extend challenges into 2026 for some sectors.
Why did the freight recession last so long?
Multiple factors contributed to the extended downturn: massive carrier capacity increases during the pandemic, shifting consumer spending from goods to services, persistent inflation, and ongoing supply chain disruptions. The combination created a prolonged imbalance between supply and demand. Throughout these challenges, more people began to appreciate truck drivers who kept essential freight moving despite difficult market conditions.
How can truckers prepare for the next downturn?
Focus on financial flexibility through reliable factoring relationships, diversify your customer base and freight types, control operating costs, especially fuel expenses, and invest in technology that provides competitive advantages. Building strong broker relationships and maintaining professional service standards also helps during tough markets.