Trucking's Structural Repricing: A Capacity Crunch Forces Rates to Catch Up

The core problem facing the trucking industry is a persistent and costly disconnect between revenue and costs. For years, spot rates have failed to keep pace with inflation, creating a structural margin squeeze that has pressured carriers across the board. This isn't a recent development; it's a decade-long trend that has only recently begun to reverse.

The scale of the gap is stark. As of mid-January 2026, the national spot rate stands at $2.75 per mile. But if rates had simply matched the cumulative growth in the Consumer Price Index since March 2020, they would be significantly higher, closer to the equivalent of $3.50 per mile. That's a gap of roughly 25%-a direct erosion of revenue that has been absorbed by the industry.

This disconnect is happening against a backdrop of persistent underlying inflation. The latest data shows the Consumer Price Index increased 2.7 percent for the 12 months ending December, with the core index, which excludes food and energy, ticking up to 2.74 percent. In other words, the cost of doing business-fuel, maintenance, insurance, driver wages-has been rising steadily, while the primary revenue stream for many carriers has not.

The financial pressure from this squeeze has been real and lasting. Owner-operators and small to mid-sized carriers, who bear the brunt of these rising costs, have been operating at breakeven or worse for extended periods. This has contributed to a gradual exodus from the industry, a trend that has helped tighten capacity in recent months. The recent rally in spot rates is a welcome correction, but it underscores how much ground the industry had to make up after years of inflationary hits without corresponding rate increases. The gap is the legacy of that erosion.

Structural Supply Constraints: The Capacity Crunch

The recent strength in trucking rates is not just a seasonal bounce. It is being driven by a tightening of supply that is structural, not cyclical. The market has reached a point where it cannot easily expand capacity, creating a fundamental imbalance.

First, the pool of available carriers has stabilized. After years of significant attrition, the for-hire trucking market saw the for-hire carrier population largely unchanged in 2025. Revocations of operating authority barely offset new grants and reinstatements, pushing the annual net change close to zero. This is a critical shift. It means the industry's natural mechanism for adding capacity-new entrants-has largely dried up. The market is now in a state of equilibrium, unable to respond to rising demand with more players.

Second, a severe drawdown in inventory levels is forcing more freight onto the road. The latest reading from the Logistics Managers' Index showed inventory levels at 35.1, signaling the fastest drawdown of goods in the history of the index. In practical terms, this is creating a "warehouse empty" scenario. As businesses deplete stock, they must replenish it, generating a surge in inbound and outbound truckload demand. This is a powerful, forward-looking demand signal that is not easily satisfied by existing capacity.

Finally, regulatory actions are actively reducing the available labor pool and operational flexibility. A major crackdown on illegally issued non-domiciled CDLs is underway, with 54% of North Carolina's non-domiciled CDLs reviewed by the FMCSA found to be issued illegally. Simultaneously, the agency is enforcing stricter ELD compliance, removing four devices from its list of registered ELDs for failing to meet standards. These actions, while aimed at safety, are tightening the screws on an already constrained workforce. The new administration is also enforcing English language proficiency requirements for drivers, which adds another layer of operational friction.

Together, these factors create a powerful headwind for capacity expansion. The carrier population is flat, inventories are being drawn down to historic lows, and regulatory pressure is shrinking the available labor pool. This is the structural crunch that is now forcing rates to catch up.

Market Dynamics: From Volatility to a New Equilibrium

The December rate surge presents a classic case of supply and demand colliding. Spot truckload rates climbed sharply, with van rates hitting $2.29 per mile and reefer rates at $2.69 per mile, their highest monthly averages of the year. Yet this price action was not driven by a broad economic boom. Freight volumes showed only modest gains, with the van Truckload Volume Index up just 4% month-over-month and down 3% year-over-year. In other words, the rate increase was a function of constrained supply, not soaring demand.

This divergence is the hallmark of a market at a critical juncture. The surge was fueled by a confluence of seasonal factors and severe weather that snarled logistics networks, but the underlying catalyst is the structural capacity crunch we've detailed. With the carrier population flat, inventories drawn down to historic lows, and regulatory pressure shrinking the labor pool, the market simply cannot expand capacity to meet even modest demand growth. The result is a powerful re-pricing mechanism kicking in.

The sustainability of this new equilibrium, however, will be moderated by the broader economic backdrop. Global growth is projected at 3.0 percent for 2025 and 3.1 percent in 2026. This is a moderate expansion, not a boom. It provides enough economic momentum to support freight demand and justify higher rates, but it lacks the explosive growth that could quickly overwhelm the tight supply. This creates a window where rates can stabilize at elevated levels without triggering a supply response that would collapse them.

The market is now in a delicate balance. The spread between spot and contract rates has narrowed to its smallest gap since March 2022, showing shippers' urgency to secure capacity. Yet contract rates remained largely flat, indicating a lag in the repricing process. The path forward will be one of measured adjustment, not a repeat of the volatile swings seen in recent years. The December surge appears to be the start of a new, more stable plateau, set by the industry's hard-won capacity constraints and a global economy that provides just enough demand to sustain it.

Catalysts and Risks: What to Watch in 2026

The recent rate surge has set the stage, but the real test for carriers is what happens next. The market is poised for a decisive inflection, but its direction hinges on a few forward-looking signals. The key will be distinguishing between a sustainable new equilibrium and a fleeting peak-season event.

First, watch for sustained volume growth beyond seasonal peaks. The December rally was fueled by a confluence of factors, but the underlying health of demand is critical. A meaningful shift would be seen in core shipper metrics like primary tender rejections, which have already begun to deteriorate. This is a leading indicator that capacity is shrinking relative to demand. If these rejections persist into the first quarter and beyond, it would confirm that the supply/demand balance has genuinely tightened. Conversely, if volumes falter and rejections ease, it would suggest the recent pressure was more about seasonal snarls than a fundamental shift.

Second, monitor the pace of carrier attrition. The industry's capacity crunch is built on a flat carrier population, but the trend of attrition is a crucial variable. Data shows the for-hire carrier population was largely unchanged in 2025, with revocations barely offsetting new grants. If this trend of near-zero net change continues, the capacity crunch will persist, providing a floor for rates. But if attrition resumes, even at a moderate pace, it could relieve some pressure and cap the upside. The market has been in a state of "essentially flat" rates for over a year, so any sustained change in the carrier count would be a major signal.

The key risk, however, is that the rate surge is merely a peak-season event that fades in Q1. The December spike followed a pattern of seasonal volatility, and some analysts have noted that rates have simply been following seasonal patterns since June 2025. If the underlying economic growth-projected at a moderate 3.0 percent for 2025 and 3.1 percent in 2026-fails to generate robust freight demand, the elevated rates may not be supported. In that scenario, the market could revert to its previous state of sideways movement, leaving the industry's decade-long margin problem unresolved. The structural constraints are real, but they must be matched by demand to create a profitable new plateau.

The bottom line is that 2026 will be defined by these signals. Sustained tender rejections and persistent low attrition would validate the new equilibrium. A fading of the rate surge without a corresponding demand recovery would signal a missed opportunity. The capacity crunch has created the potential for a profitable inflection, but its realization depends on the market's next moves.