Knight-Swift CEO: Freight market recovery will be 'linear,' not a sudden pop
Key takeaways
- Knight-Swift reports a 44% increase in operating income in Q2.
- For-hire market improvements are slow and supply-driven.
- Regulatory changes and insurance costs pose challenges for carriers.
- Driver pay and recruitment efforts are increasing, though not at the levels seen in 2021.
Carriers that are looking for the freight market to pop in the coming months and generate massive margins for the industry might need to wait a long time. Adam Miller, CEO of Knight-Swift Transportation, told investors and analysts that the recovery now underway is likely to move higher gradually.
Asked July 22 about the dynamics of the improving market after Phoenix-based Knight-Swift reported its second-quarter earnings, Miller said on a conference call that his team has seen “a couple of anecdotes of demand starting to improve” but added that it is “certainly not broad-based yet.”
The factors underpinning the improvements – tighter regulations on driver licensing, stricter scrutiny of cabotage and the Montgomery ruling on broker liability tops among them – naturally move more slowly than spot prices or demand turns.
“So because it’s supply-driven, it does feel like it could be a bit more durable, but it could be a little bit more linear,” Miller added. “When demand jumps up, shippers really need capacity because they’re missing sales […] and so they’re a bit more willing to pay to rate increases to get that capacity. In the market today, we’re moving the same goods for the same sales [but with] a lot fewer trucks to service that. And so you have to really negotiate and push to get the rates that you need.”
Knight-Swift, the No. 3 company on the 2026 FleetOwner 500 list of for-hire carriers, posted a second-quarter net profit of $43.2 million on revenues (ex-fuel surcharges) of $1.76 billion. Operating income jumped 44% from the same time last year to $105 million thanks in large part to a near-doubling of profits from the company’s core truckload business, which also lowered its adjusted operating ratio to 91.0% from 94.6% in Q2 of 2025. Knight-Swift’s LTL business also built momentum during the quarter, although its profit growth was less marked.
Miller and CFO Andrew Hess told analysts that the improvements noted in the second quarter should carry into the current three months as spot rates generally hold up and more new higher-priced contracts kick in.
Also helping, Hess added later on the call, is that Knight-Swift teams have been focusing on cutting the company’s deadhead miles traveled with the help of new planning tools. That momentum, he said, has been building throughout 2026.
“In an environment like this, in a good market, we have an opportunity to really build a more efficient network,” Hess said. “And so, when we’re making the fundamental changes we’ve made in our structural processes along with the market where you have an opportunity, those are sustainable changes for the foreseeable future.”
Other tidbits from Knight-Swift’s report and conference call included:
- Regular commentary on rising driver pay: Miller said the company has picked up its marketing spending and expanded its recruiting group to fill more truck seats. Compensation increases for drivers, he added, are unlikely to pop as it did in 2021, however.
- Another cost pain point for the sector: The Montgomery decision “significantly impacted” Knight-Swift’s insurance policy renewal in June. Miller said the company’s insurers praised his team for their vetting but still reduced Knight-Swift’s capacity and increased premiums “to multiples of our prior coverage.”
- A US Xpress milestone: The brand’s over-the-road group produced its first quarterly profit since Knight-Swift acquired the company in mid-2023. Hess said the US Xpress team has been able to more aggressively hike prices of late because it started from a lower point.
Shares of Knight-Swift (Ticker: KNX) fell nearly 5% on the heels of executives’ earnings report and conference call but recovered some ground on July 24. They closed the week at $72.50 and are still up nearly 40% year to date, a surge that has grown the company’s market capitalization to nearly $11.8 billion.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of experience in business journalism. Since 2021, he has written about markets and economic trends for Endeavor Business Media publications FleetOwner, Healthcare Innovation, IndustryWeek, Oil & Gas Journal, and T&D World.
With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati. He later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector and many of its publicly traded companies.