CHARLOTTE, North Carolina—It took a while, but it seems the tide has finally turned. The trucking industry has experienced a years-long freight recession that Bob Costello, chief economist at the American Trucking Associations (ATA), said is winding down. 

“We are in a cycle like we have never seen before, and it is all supply driven,” he told a ballroom full of ATA members and trucking media here. 

Costello refers to “supply” as trucks to haul freight. The flip side of that, demand, is the amount of freight for those trucks to haul. It was the imbalance of the two that was the problem. But what Costello is seeing—and what freight rates and freight tonnage indicate—is a balance.

Trucking's capacity exit was a few years in the making

Nobody wants to see people lose jobs and companies go out of business, but in trucking, it’s simply the way the market corrects itself. The balancing in supply and demand—or trucks and the amount of freight to haul—was a process that saw two phases, according to Costello.

“This is a longer story than just this year, or even this year and last year,” Costello said. 

Trucking saw a freight boom during COVID. With plenty of freight to go around, players rushed into the industry. That freight volume began to dwindle in December 2022, and the lull that proceeded was unlike any the industry has yet seen. This lull coupled with the increasing cost of trucking operations caused many fleet companies and owner-operators to cease operations. This period is what Costello refers to as the first phase of capacity exits.

“We were seeing capacity reductions in the industry, but they were slow,” he said. “It was sort of a whittling away of capacity, and as a result … it never got low enough so that we could get back to equilibrium.”

Then came 2025. The year brought in a new administration, the crackdown on driver rules, stricter enforcement of regulations, and court rulings that pushed capacity out of the industry even further.

Costello rattled off several factors that influence capacity exits: English proficiency, B1 drivers, non-domiciled CDLs, and others. He pointed to B1 driver crackdowns in particular. This year, shipments in the Southwest (Texas, Arizona, New Mexico, and Arizona) have decreased by about 13%, but shipper spending has increased nearly 40%. 

“That tells me that this crackdown is absolutely making a difference and having an impact,” he said.

Will this capacity exit continue? Costello said he’s often asked this question. He points to the overall economy.

The current economic environment will keep capacity at bay

The increased inflation and the uncertain tariff environment plagued both businesses and consumers alike in the past few years. Throw in the high fuel prices of 2026 and the economic outlook is depressing.

“We do have quite a few headwinds in front of us, right?” Costello said. “Think about this: the trade situation with tariffs. … Government debt is now getting at really high levels, right? That's a problem. We've got wars in Iran and in Russia. That's causing some issues on the energy side. Inflation is starting to heat up again. … And both short-term and long-term interest rates are going up.”

The goal of tariffs was to increase employment, bring down the trade deficit, and bring more factories into the U.S., Costello said. None of those goals have been achieved as of yet. In fact, money spent on building U.S. factories is down 22% year over year, and net job growth in the manufacturing sector is down 84%, according to Costello’s analysis.

Then there are interest rates keeping families and individuals from buying homes, and fuel prices that chip away at family budgets. Not only have fuel prices increased substantially, but the U.S. is running out of oil reserves. Once those reserves dry up, one can only expect fuel prices to surge even higher.

These economic factors will keep freight volumes low.

On top of that, Costello doesn’t expect fleets to add equipment and drivers to their operations, effectively rendering a capacity increase unlikely. While he believes equipment sales will increase by about 14% YOY from 2025, he thinks the majority of those purchases are equipment replacements and not additions.

The country’s current economy is, in a word, struggling. But at the same time, the trucking industry is finally beginning to see a light at the end of this multi-year freight recession tunnel.

“I think we've got some runway here, and I think that we'll stay in this for a while,” Costello said of the industry’s current upward trajectory.