The US trucking industry experienced the late-cycle phase of the classic truckload cycle in 2022, leading us into the bottoming phase in early 2023. In October 2024, the rebalancing process continues slowly, though progress has been made.
As we look ahead to 2025, the North American trucking industry is poised to navigate a complex landscape shaped by economic transitions, regulatory changes, and evolving market dynamics. These are some of the key factors influencing the industry, including freight demand, equipment production, and macroeconomic trends, as well as emerging challenges and opportunities.
How confident should your business be in ACT's forecasting for 2025?
For 2023, ACT's forecasts for the shipments component of the Cass Freight Index® were 96.9% accurate on average for the 24-month forecast period.
ACT Research’s 2023 forecasts for the Cass Truckload Linehaul Index® were 96.6% accurate on average over the past 24 months, and 98.5% accurate over the past 12 months.
Trucking Industry Outlook – 2025
Economic Overview:
As we enter 2025, the U.S. economy is anticipated to face a modest slowdown, with GDP growth projected to moderate to 2.0% year-over-year. This deceleration reflects the cumulative impacts of tighter monetary policy, higher interest rates, and more cautious consumer spending. Although inflationary pressures continue to ease, high borrowing costs weigh on business investment and residential construction. Consumer spending, while steady, is expected to slow compared to recent years, providing a stable but restrained foundation for freight demand. Overall, the economic environment in 2025 will be challenging for industries reliant on rapid growth but should remain supportive of moderate freight demand.
Transportation Sector and Freight Trends:
The transportation sector is expected to navigate a challenging environment in 2025, with cooling freight demand and continued adjustments in supply chain capacities. The ACT Freight Composite Index projects a modest increase, though growth is expected to remain below 2024 levels due to softer demand and lingering capacity adjustments.
- Slower Freight Growth:
Freight growth is projected to slow in 2025, driven by softer consumer demand and inventory adjustments across retail and manufacturing. As retailers stabilize their inventories after pandemic disruptions, freight volumes will reflect a more measured environment, with limited urgency in replenishment cycles. - Capacity Rebalancing Continues:
Overcapacity remains a significant challenge, particularly within the truckload market, where rebalancing efforts are ongoing. While private fleets continue to absorb a larger share of freight volume, diverting it from the spot market, the rate recovery remains prolonged. This dynamic will keep spot rates under pressure, likely delaying a clearer equilibrium until late 2025. - Modest Spot Rate Gains:
Truckload spot rates have seen gradual increases entering 2025, but upward momentum remains limited by ongoing overcapacity. Fleets are taking a conservative approach to expansion, waiting for further market stabilization. As inventories normalize and consumer demand stabilizes, a more favorable rate environment could emerge by late 2025, with potential demand increases in retail and e-commerce sectors driving freight needs.
Class 8 Trucks: Inventory Overhang and Demand Shifts
Class 8 truck production is expected to decline in 2025 due to elevated inventory levels carried over from 2024 and tempered demand as fleet operators adopt a more cautious stance. While vocational segments will provide some market support, the broader Class 8 market faces challenges from overcapacity in the for-hire sector. Fleets are likely to focus on working through excess inventory, and production is expected to stabilize rather than grow. Regulatory drivers, particularly emissions compliance, will also influence buying behavior but may not be enough to offset slower overall growth in the segment.
Medium-Duty Vehicles (Classes 5-7): Declining Production
The medium-duty truck market is projected to contract significantly in 2025, with a forecasted production decline due to continued inventory challenges and economic caution among fleet operators. Body-builder supply chain constraints, which have hindered market performance, are expected to persist, further suppressing production. A gradual recovery is anticipated only toward the second half of 2025, contingent on improvements in inventory management and supply chain conditions.
Trailers: Anticipating a Gradual Recovery
Trailer production is forecasted to slow in 2025, reflecting cooling demand across the transportation sector. While there remains a steady need for replacement trailers, particularly refrigerated units, overall order activity is expected to be subdued as fleets defer capital expenditures amid uncertain economic conditions. Persistent overcapacity will keep production in check through much of the year, with slight improvements projected in the latter half as the market moves toward balance.
Regulatory and Market Drivers:
Key regulatory shifts are expected to shape market behavior in early 2025. The CARB Clean Truck Regulation rollout across five states will drive fleet upgrades, particularly in emissions-heavy vehicles. The continued shift toward zero-emission vehicles (ZEVs) is also gaining momentum, supported by expanding federal and state incentives and infrastructure investments. Battery-electric and hydrogen fuel cell trucks are increasingly explored for fleet integration, with significant advancements in charging infrastructure expected to support adoption beyond pilot projects.