Freight Outlook: What’s Coming Next in 2025?

A vital cog in the national supply chain, the U.S. trucking sector spent much of 2024 navigating a complex landscape thanks to shifting dynamics and evolving challenges. The industry has shown resilience in the face of recent economic fluctuations, high inflation rates, and shrinking consumer bank accounts, but it’s also had to contend with transportation-specific roadblocks like rising fuel costs, new regulatory burdens and a persistent driver shortage.

Moving into 2025, many of these challenges will remain as new ones emerge and untapped opportunities surface. The new U.S. presidential administration takes the reins in January, for example, and is promising a pro-business mindset that could help spark new activity in the national economy. The Federal Reserve has also started down the slow path of reducing interest rates and acknowledges that the hikes indeed helped bring rates of inflation down to more affable levels.

The e-commerce boom—which reshaped consumer behavior and increased demand for efficient and reliable transportation services—is also still going strong. According to EMARKETER, domestic e-commerce sales were on track to grow by 8.7% in 2024 to nearly $1.2 trillion, comprising 16.2% of total retail sales. Sales are expected to grow at a modest and stable clip through 2028, with e-commerce progressing more than four times faster than in-store sales.

The logistics industry was also able to buck some potential shocks in recent months, including major port and parcel carrier strikes, all of which were resolved fairly quickly. It’s important to note that the East Coast port strike hasn’t been completely resolved yet, and both sides are going back to the bargaining table to hammer out the final points in January.

Lingering Issues to Fix 

Despite some signs of hope that are already beginning to emerge, the 2025 freight outlook remains murky at best as companies plan out their transportation moves for the year ahead. “In terms of the outlook for 2025 from a macro basis, it’s still pretty much wait-and-see at this point, to be honest,” says Charles Craigmile, CEO at Revenova.

“I think we’ve avoided some major shocks for now,” he continues. “For example, the port strikes on the east coast could have potentially been as disruptive as the COVID lockdowns. Some open issues still need to be resolved before the book can be officially closed on that issue.” Automation is one tricky area that the sides haven’t come to an agreement on yet, with auto gates being one of the focal points of their discussions.

“The auto gate allows you to scan the trailer or the container and get all of the relevant information for clearing the container in terms of the trailer number, commodity listing, etc., by simply driving through the security auto gate,” says Craigmile. “The unions obviously resist that because it removes labor from the processing of containers, so that’s one issue that has to be resolved soon.”

LTL Consolidation Increases

The American trucking industry has always been highly fragmented, but that’s slowly changing in response to the current market challenges. According to the U.S. Department of Transportation, there were over 577,000 active U.S. motor carriers registered with FMCSA that own or lease at least one tractor. Out of those carriers, 95.5% operate 10 or fewer trucks and 99.6% operate 100 or fewer trucks.

In 2024, smaller less-than-truckload (LTL) carriers began consolidating as larger companies controlled a growing share of the market. According to the Journal of Commerce, merger and acquisition activity on the highly-consolidated LTL market was picking up speed. “That could mean new options for shippers trying to find the right home for their LTL freight in a market that has been in flux since Yellow collapsed in July 2023,” the publication adds.

While large companies such as TFI International and Knight-Swift Transportation Holdings are talking about LTL acquisitions, JOC says small carriers are also expanding by acquisition. “I think if you’re not growing, you’re sinking,” Mike Moran, president of Moran Transportation, told JOC.

On a good note, the number of carriers exiting the market has slowed, which is a positive sign that will hopefully carry over into 2025. Commercial Carrier Journal says carrier exits remained stable in September, with about 1,300 operators closing for the third consecutive month. Low trucking rates are challenging for small businesses, it adds, making it hard for many to remain viable.

“Meanwhile, new carrier entries have decreased by 5.1% since August, though 7,800 new carriers still joined the market,” CCJ reports. “Despite being down 10% compared to last year, new entries remain 38% above pre-pandemic levels in 2019.” 

What’s Around the Next Corner

There’s no doubt that the trucking market had a turbulent year in 2024, which is poised to end on a “cautiously optimistic” note. Fleet management software maker Motive expected to see growth in the trucking sector by November 2024, but says stagnant freight prices and carrier exits “slowed the rebound slightly.”

“We expect moderate growth to return in the first quarter and long-term growth trends of 5.7%, year over year, to be restored by the end of 2025,” the company says in its new Holiday Outlook Report. “With the oversupply of carriers now gone, the market looks more like it did before 2020, drawing closer to more traditional, cyclical trends.”

Global economic uncertainty could present some headwinds, and Motive is telling companies to keep an eye on fluctuating interest rates and diesel prices worldwide. “In 2025, retail prices will increase. Higher freight and transportation costs will compel retailers to hold onto inventory and pass these costs to consumers early in the year, even as inflation cools,” it adds. “Facing increased pressure and narrow margins, retailers will be less inclined to absorb rising costs themselves.”

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