Trucking's Turn: Capacity Crunch and Intermodal Shifts Signal a Rate Recovery in 2025

The trucking industry, long overshadowed by post-pandemic volatility and intermodal competition, now stands at a critical inflection point. SONAR data reveals that dwindling carrier capacity, rising operational costs, and the saturation of intermodal growth are converging to force a sustained rebound in truckload rates—despite lingering demand uncertainties. This shift presents a compelling investment opportunity for those willing to navigate near-term headwinds and position for structural recovery.

The Capacity Contraction Crisis

SONAR's Outbound Tender Reject Index (OTRI), a bellwether for capacity utilization, has climbed to 7.15% in June 2025, marking a notable tightening. This reflects a shrinking pool of available carriers: Class 8 tractor orders fell 13% year-over-year in late 2024, while trucking employment has declined for six consecutive months. The Federal Motor Carrier Safety Administration reports a net loss of 1,739 operating authorities since mid-2023, signaling an irreversible exit of smaller carriers.

The dry van sector, which comprises 60% of truckload freight, has stabilized at 5-7% tender rejections, but the reefer market—a critical segment for perishables—spikes to 13%, highlighting sector-specific shortages. These metrics confirm that capacity is no longer expanding to match demand, even as freight volumes remain below 2024 levels.

Intermodal's Saturated Growth and the Return to Trucking

Intermodal rail, once a cost-effective alternative to trucking, faces its own constraints. SONAR's Trade War Command Center shows rail intermodal volumes have plateaued due to 50% year-over-year declines in China-to-U.S. container imports, reducing port drayage demand. Meanwhile, rail's reliance on bulk commodities like coal and lumber has made it vulnerable to tariff-driven demand shifts.

This saturation creates a structural advantage for trucking. SONAR's Load-to-Truck Ratio (L/T) for dry van surpassed 7 in early 2025—the highest in two years—indicating carriers can now reject unprofitable loads. The National Truckload Index (NTI), a real-time rate proxy, has risen steadily to $2.44/mile, with spot rates edging above contract rates for the first time since 2021. This rate inflection point signals a permanent shift toward carrier pricing power.

Navigating Near-Term Risks for Long-Term Reward

While the recovery is structural, investors must acknowledge near-term headwinds:
1. Demand Volatility: Freight volumes remain subdued, with private fleets still absorbing 10-15% of capacity. A consumer-driven recession could delay the rebound.
2. Fuel Risks: Diesel prices, stable at $3.70/gallon, could spike due to geopolitical tensions, squeezing carrier margins.
3. Tariff Uncertainties: Trade policies continue to distort freight patterns. SONAR's Container Atlas shows a 50% drop in China bookings since 2024, favoring trucking for shorter-haul, tariff-sensitive goods.

Investment Strategy: Focus on Balance Sheets and Contracts

The optimal plays are carriers with strong balance sheets and exposure to contract freight, which offers steady cash flows amid spot market volatility. Consider:
- J.B. Hunt Transport (JBHT): Benefits from its asset-light model and long-term contracts in e-commerce and retail.
- Covenant Transport (CVTI): Focused on high-margin regional lanes with limited intermodal competition.

Avoid overexposure to intermodal players like Union Pacific (UNP) and CSX (CSX), whose growth is tied to declining container imports and bulk commodity cycles.

SONAR's 28-day rate forecasts and Tender Rejection Index provide actionable tools to time entry. Investors should look for the NTI to breach $2.60/mile, a level not seen since 2021, as confirmation of sustained recovery.

Conclusion

The trucking market's recovery in 2025 is not a matter of if, but when. Capacity contraction, intermodal saturation, and a rate inflection point driven by SONAR's data all point to a sustained rebound. While near-term risks remain, investors who prioritize financially robust carriers and avoid intermodal traps will position themselves to capitalize on a market poised to regain its pricing power. The time to act is now—before the inflection point becomes a full-blown boom.