July Market Recap – What Small Carriers Did Right (and Wrong)

The freight market in July 2025 remains a study in volatility, with small carriers navigating rising costs, regulatory shifts, and supply chain disruptions. Amid these challenges, some operators have emerged as models of resilience through strategic cost management, tech-driven efficiency, and proactive relationship-building. Others, however, have faltered due to reactive decision-making and inadequate preparation. This article dissects the key actions taken by small carriers—and their implications for investors looking to capitalize on peak season opportunities.

What They Did Right: Building Foundations for Peak Season

1. Cost Management: Precision Over Perfection

Small carriers that thrived in July prioritized cost-per-mile (CPM) optimization, leveraging tools like Summar's free CPM calculator to track expenses down to the penny. By reducing deadhead miles (now accounting for just 12% of total mileage, down from 16.7% in early 2025), these operators cut fuel waste and idle time. For instance, adopting fuel cards with rebates (e.g., up to $0.90/gallon) and partnering with digital platforms like Truckstop enabled real-time rate comparisons, ensuring loads were priced profitably.

2. Tech Adoption: AI and Automation as Lifelines

The winners invested in AI-driven route optimization and predictive analytics. Platforms like Cargofive and Forbytes streamlined freight matching, while predictive models helped carriers anticipate demand spikes and avoid overcapacity traps. For example, a Midwest-based carrier reduced dwell time (time spent waiting at docks) by 20% using real-time tracking and automated scheduling tools. Meanwhile, electric vehicle (EV) pilots—supported by federal grants—positioned some operators to comply with California's Low Carbon Fuel Standard (LCFS) without crippling costs.

3. Relationship Building: Diversification Over Dependency

Smart carriers avoided overreliance on single shippers or brokers. By expanding partnerships with regional 3PLs (third-party logistics providers) and direct-to-shipper contracts, they insulated themselves from spot market volatility. A notable example: a Texas-based fleet secured a 4-year contract with a retailer, ensuring stable revenue even as spot rates dipped to $1.85/mile (vs. $2.20 in 2024).

What They Did Wrong: Reactive Strategies and Missed Opportunities

1. Fuel Budgeting: Ignoring Regulatory Headwinds

Carriers that neglected California's LCFS mandate faced a rude awakening. While diesel prices dipped to $3.24/gallon by late July, compliance costs added 5–8 cents per gallon for fleets operating in regulated regions. Those without rebate programs or bulk-fuel agreements saw margins shrink by up to 15%.

2. Tech Aversion: Sticking to Outdated Systems

A subset of small carriers clung to legacy TMS platforms, failing to adopt free or low-cost alternatives like FreightWaves. This oversight led to missed opportunities for route optimization and real-time fuel tracking. One operator reported a 30% increase in idle miles due to poor software integration.

3. Labor Shortages: No Long-Term Solutions

Despite rising demand, some carriers treated driver shortages as a temporary issue, neglecting retention programs or training initiatives. The result? A 10% rise in turnover rates for underprepared fleets, exacerbating operational gaps.

Risks Ahead: Why Caution Remains Warranted

• Fuel Volatility: While diesel prices are projected to average $3.50/gallon in 2025, geopolitical risks (e.g., Middle East tensions) could destabilize markets.
• Regulatory Uncertainty: California's LCFS credit pricing remains unresolved, with potential cost spikes if cap measures fail.
• Peak Season Overreach: Carriers that expand capacity without stress-testing CPM metrics risk losses when demand softens post-holiday.

Actionable Strategies for Investors

1. Evaluate CPM Trends: Prioritize carriers with declining CPMs (e.g., < $2.00/mile) and transparent cost-tracking systems.
2. Tech Adoption Metrics: Look for investments in AI route optimization, real-time fuel monitoring, and EV pilot programs.
3. Fuel Management Practices: Favor carriers using rebate cards and bulk-fuel partnerships. Avoid those reliant on volatile spot market pricing.
4. Contract Mix: Seek operators with >40% revenue from long-term contracts (vs. spot loads), ensuring cash flow stability.

Conclusion

July 2025 underscored a stark divide: carriers who embraced precision cost management, tech innovation, and diversified partnerships thrived, while those clinging to outdated practices faltered. For investors, the path to profit lies in identifying operators with scalable tech stacks, compliant fuel strategies, and resilient labor models. As peak season approaches, these traits will determine which small carriers survive—and which become acquisition targets for larger players.

Stay vigilant, but stay invested.