NEW ORLEANS–The overview of the freight market at Trimble’s Insight conference here for customers and partners had the feel of FreightWaves/SONAR’s monthly State of Freight webinar, as experts in the field tried to peel back the reasons for the persistence of the freight recession and when the market might turn.
The panel, entitled “Transportation 2025-2026: A look back, a look ahead” even had FreightWaves and SONAR CEO Craig Fuller as a member, as he and colleague Zach Strickland comprise the featured analysts at the State of Freight webinars.
At the Trimble conference, Fuller was joined by Lee Klaskow of Bloomberg Intelligence and Angela Acocella of MIT’s Center for Transportation & Logistics to discuss a market outlook that found the panelists uncertain whether to describe it as a glass half full or half empty.
As FreightWaves does in its coverage of the State of Freight webinars, here are five takeaways from the Trimble (NASDAQ: TRMB) panel held here.
Klaskow said a word to describe what has happened to the market so far this year is “chaos.” “Going into the year, we were pretty excited after the election that the Trump administration would get us lower taxes and lower regulation,” he said. “Business behind it was going to be great.”
Markets expected there would be tariffs on China, according to Klaskow. “And then all of a sudden, tariffs were against everybody and that created a lot of uncertainty in the supply chain. We’re still dealing with that.”
“Chaos is the one thing I wasn’t expecting.”
Acocella discussed the impact of that chaos. Announcements of potential tariffs were greeted with uncertainty, she said. “Did it go through?” she said of the reaction. “Was it backtracked? How much was it going to be? And that caused a lot of uncertainty.” The result would be shippers ordering larger than usual quantities of a good, Acocella said, “but then decreasing it because now we have all this inventory but we don’t have the demand for it.”
With so much focus on capacity and the possible impact on it from a crackdown on various categories of drivers, the question of volume can get lost in the shuffle. Fuller, who had made public predictions about the end of the freight recession a year ago only to see that forecast fizzle, said a key reason for that was a collapse in demand.
Enough capacity had been removed from the market that a forecast of the end to the freight recession was justified, he said. “What we did anticipate was that volume had to stay up,” he added.
But based on the SONAR Outbound Tender Volume Index (OTVI) which measures volume on a national basis, “what we’ve seen is probably the largest drop in volume, certainly since we’ve been tracking data since 2016,” Fuller said. Other indices, such as the Cass Index, are showing the same, he added.
The issue primarily is what Fuller said was a “pretty significant industrial recession.” “The question now is how long are we going to be in this pretty abysmal freight market that is not capacity-driven,” he said.
Acocella noted that previous freight recessions ended through one-off occurrences, such as the introduction of ELDs in 2017 which tightened capacity, or the freight boom set off by COVID. But for the current freight recession, she said, “we haven’t seen something big enough to really rock the entire market that increases activity.”
Taking drivers off the road through enforcement of various regulations is an issue and a goal unto itself. But Fuller said it is part of a bigger picture that pushes back against immigrants and immigration on several fronts, with trucking having a key role in the discussion.
“Trucking is the sort of epicenter and ground zero for the immigration story of this administration,” Fuller said. “This administration believes immigrants are a challenge and a problem, and trucking affords the administration a safe place to have this conversation with the American public.”
The core feature of that conversation is the question of safety and immigrant drivers. An average American watching a news segment on an immigrant father “being dragged out of their homes with young children around just feels an enormous empathy with these people.”
But if the issue is whether foreign-born drivers are piloting an 18-wheeler through lax enforcement of various licensing and other laws, the conversation shifts.
“So whenever there’s a (truck) accident involving an immigrant, you’re going to have a situation where the administration is going to focus on,” Fuller said. Statististically, according to Fuller, there are about 10 accidents per week involving an immigrant driver.
There was extensive discussion about the crackdown on foreign-born drivers, whether it was through enforcement of an English language requirement or pressuring states to withdraw non-domiciled CDLs, which overwhelmingly are issued to non-American born drivers.
The paper written by Perry starts with an estimate that 25% of workers in trucking are immigrants, “reasoning that the difficulties of trucking work attracts immigrants, similar to those in construction and agriculture.” He then estimated that about 8% of workers in trucking are undocumented.
If the Trump administration’s efforts to remove undocumented drivers from the roads is successful, “it would reduce the driver population by almost 16%, or 614,000 drivers,” Perry wrote.
The threats to that population of drivers, Perry wrote, are withdrawal of a CDL due to a lack of English proficiency; removal of drivers for lack of documentation of legal immigration status; and ending CDLs granted to non-domiciled drivers.
Fuller noted a possible impact to removing that many drivers from the roads: an end to the parking crisis. “If we actually eliminate 600,000 drivers, how much of the truck parking problem goes away?” he said. “I think it is going to be interesting to see whether that is a persistent problem to the degree that it has been.”
Kaslow, who has experience as a sell-side analyst in the freight sector, said this past summer he was “probably as pessimistic as I ever was.” But he said he is “getting incrementally more positive” and the looming contraction in capacity because of drivers being taken off the road is a key reason for that.
That has made Kaslow more confident about trucking but his views on the economy were decidedly bearish. He said many retailers have been eating at least a portion of tariffs. But that short term phenomenon may be coming to an end, he said, resulting in “more inflation and price pressures in the coming months. It will be very interesting to see how consumers react to that.”
But his pessimism was not so overwhelming that it stopped him from predicting “I think the second half next year won’t be as bad.”
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