The truckload market is grappling with lingering excess capacity that has weakened its rate recovery. Less-than-truckload (LTL) operators are also under pressure as margins slide. Tariffs and softer consumer spending have retailers worried, forcing them to recalibrate holiday inventories to protect margins.
Analysts are predicting a potential restocking cycle on the horizon that could bring relief to trucking in 2026, even as current conditions remain subdued. Meanwhile, the end of the de minimis exemption is driving e-commerce brands toward foreign-trade zones (FTZs) to manage costs and maintain flexibility.
Trucking Overcapacity Continues to Pressure Rates
According to FTR Transportation Intelligence, U.S. truckload overcapacity is expected to last until 2027, which will keep freight rates subdued while shippers continue to hold the pricing power. Avery Vise, FTR’s vice president of trucking, noted that although large carriers are leaving the market, the number of very small fleets remains 39% higher than pre-pandemic levels.
With the active truck utilization stuck at 92-94% since 2024, this shift from larger fleets to small operators has stabilized capacity. Rate growth is expected to remain below inflation, with contract dry van rates rising only 1.5% in 2025 and 1.2% in 2026. Without a demand boost from stronger consumer spending, carriers are facing limited recovery options.
LTL Carriers Face Margin Pressure as Volumes Decline
U.S. LTL carriers are struggling with falling shipment volumes, eroding margins, and renewed pricing pressure. In August, Old Dominion Freight Line saw an 8.2% drop in daily volumes, while XPO was down 3.4%, and Saia declined 2.2%. Only ArcBest’s ABF Freight posted growth, with shipments up 5%.
However, despite the softer demands, LTL carriers continue to expand their networks, including Dayton Freight, which has opened a new Pennsylvania terminal. Pricing discipline, which has been a hallmark since 2009, is showing cracks, with some carriers discounting aggressively to fill trucks. Still, contract renewals are yielding modest 2-3% increases, while the long-haul LTL Producer Price Index rose 7.3% year over year in July.
Retailers Adjust Holiday Inventories
According to August’s Logistics Managers’ Index (LMI), the strategies favored for managing the holiday inventory this year show a divide between large retailers and smaller competitors. Walmart is concentrating on proven products to secure discounts and avoid steep consumer price hikes, while smaller companies struggle with higher costs, reporting an inventory cost index of 83.7 versus 72.2 for larger firms.
Tariffs are driving up expenses, with Petco warning of rising impacts in Q3 and Q4. Logistics executives are also noticing erratic demand patterns and reduced replenishment orders. Ocean freight volumes into the U.S. are down 20% in recent weeks, with fewer container ship arrivals at Los Angeles and Long Beach, signaling weaker late-season imports and potential pressure on holiday sales.
Restocking Reset Could Lift Trucking in 2026
The U.S freight slump is now in its fourth year. And according to analysts at the Journal of Commerce, there might be relief in early 2026 as retailers and wholesalers replenish lean inventories. Keith Prather of Armada Corporate Intelligence has noted that only 7% of the market is overstocked, which raises the risk of stockouts in sectors outside durable goods.
Retail inventory-to-sales ratios (ISR) fell to 1.30 in June, 11% below 2019 levels, while manufacturers held higher-than-average stocks with an ISR of 1.57. Paul Bingham of S&P Global said the economy is not entering a recession, but GDP growth is being forecast to slow to 1.9% in 2025 from 2.8% in 2024.
De Minimis End Spurs Demand for FTZ Warehouses
E-commerce companies are increasingly turning to U.S. FTZs after the $800 de minimis duty exemption ended on August 29. FTZs, authorized by Congress in 1934, allow importers to defer tariff payments until goods leave the zone for domestic sale.
Categories most affected include apparel and beauty, industries that heavily rely on de minimis exemptions for direct-to-consumer imports. By using FTZs, retailers can avoid large upfront tariff payments and maintain flexibility in inventory management, softening the cash flow hit as tariff exposure grows.
Navigating the Freight Market with a Stable Platform
EKA Omni-TMS™ uniquely caters to carriers and is engineered for a better user experience, streamlining operations and increasing agility. The application is designed to support carriers’ growth and competitiveness with easy yet high-powered user processes.
At EKA Solutions, we leverage experts and a robust platform to ensure you have zero friction at every step of the workflow. Our innovative, cost-effective, user-friendly ecosystem for carriers, brokers, and shippers prioritizes transparency, efficiency, and robust capabilities. Connect with us today to experience the difference.