A traditional freight recovery would probably see freight demand rising, but that isn’t the case so far. Low supply and flat demand, if both persist, could create an interesting market cycle—perhaps a slower one, more subject to seasonality.

"We think the cycle is going to be stronger for longer," ACT Research's Tim Denoyer, VP and senior analyst, told attendees at the firm's recent Market Vitals seminar.

Here are some of the mechanics driving this unique freight cycle, with a focus on freight demand.

A market cycle with flat demand?

The end of the long freight recession means the beginning of an upcycle for for-hire trucking. What does that mean for a market with flat demand?

Standard truckload cycles can generally be split into four phases: bottoming, early cycle, mid cycle, and late cycle. As illustrated by ACT’s graph, for-hire trucking is just out of the bottoming phase.

“We spent a good three years in that bottoming phase, roughly 2022 to 2025. It was late last year that we made that transition to early cycle, and we think it was a reduction in both equipment supply and driver supply that led to it,” Denoyer said.

According to Denoyer, trucking’s early cycle is typically sparked by shrinking for-hire supply. The shift to mid-cycle relies on strengthening freight demand. Today, that demand remains muted.

Following the latest American Trucking Associations Truck Tonnage Index, for example, ATA’s Chief Economist Bob Costello called freight levels “choppy” and “lackluster.”

The Census Bureau’s Value of Construction Put in Place Survey has recorded an explosion of data center spending since the centers became a standalone category in 2024. Those builds are driving heavy-haul and flatbed demand, offsetting the construction market’s cold single-family housing environment.

Seasonality a major factor for this freight cycle

Denoyer predicts that capacity constraints will continue to dictate rate behavior. Major factors could include federal enforcement and seasonal lulls in driver availability.

With CDL and driver qualification crackdowns, the industry’s eyes remain on the federal government’s ability to squeeze for-hire capacity.

“The question from here is: Are they going to stay at this level [of enforcement]? Because if they stay at these kinds of levels for the next two years, which is possible, we’re going to see a much tighter driver market and much higher freight rates,” Denoyer said.

And, with higher load-to-truck ratios, calendar swings could have much larger impacts on rates.

“I think a general feature of this cycle is, because it’s supply-driven, it’s going to be more sensitive to seasonality,” Denoyer said.

Denoyer suggested rates would be soft throughout Q3, a seasonally soft time for demand, and could heat up near Thanksgiving when for-hire supply tends to tighten.

“I think this year we’re going to see it in an amplified fashion because truckers are not profit maximizers,” Denoyer said. “Many are … but the average driver takes more vacation when they’re making more money and drives more when they’re making less money.”