Last Updated May 23, 2025
The past few years have been tumultuous for many within the freight industry. Reduced spending for shipping services beginning in post-COVID times led to historically low demand, causing what’s now known as the “Great Freight Recession.”
Beginning in 2022, effects from the freight recession were felt throughout the entire supply chain. It didn’t help that diesel fuel prices skyrocketed, while nationwide inflation increased costs associated with running a business.
The purpose of this article is to dissect whether or not the freight recession is officially over. From 2024 to 2025, there were several positive economic trends that suggested we might be on the other side of the recession. However, sources differ on whether these improvements will remain or if the industry will struggle once again.
In this article, we’ll overview the following:
- What caused the freight recession?
- Signs the industry may be recovering
- The current state of the freight economy
- Why the recession may be over
- Steps for continued industry improvement
What Caused the Great Freight Recession?
In the late 2010s, there was incredibly high demand for industrial shipments, leading to a trucking industry boom in 2018 that was eventually coined “The Big Bang”. Shipping demand was so high that there weren’t enough drivers to keep up. This shortage caused many new carriers to step into the ring as they saw opportunities to enter a thriving industry. One freight analyst described the influx of trucks in the market around this time as “unprecedented.”
By 2019 and into 2020, the market inevitably became oversaturated with carriers. Despite this, the COVID-19 pandemic led to a surge in e-commerce shipments, so demand for motor carriers briefly kept pace with the soaring supply.
However, once consumer spending habits reverted back to pre-pandemic levels in 2022, red flags emerged. Suddenly there was a historic overcapacity of trucking companies, and with the drop in consumer spending, the shipping demand decreased, leading to spot rates plummeting.
To make matters worse, diesel fuel costs and nationwide inflation skyrocketed, leading to record-high operational expenses. The operating cost of running a trucking business was $0.64 per mile by 2022, more than double the cost just two years prior ($0.30). All levels of the supply chain felt the impact of rising fuel, rising operational costs, and an uncertain economy. Simply put, running a trucking company became increasingly difficult and costly. The freight recession was in full effect.
Signs the Recession Began Slowing: What’s Changed?
During the recession, everyone from carriers to brokers to third-party logistics providers (3PLs) were forced to adapt and shift business strategies in order to make a profit. Because spot rates were increasingly volatile, carriers stopped relying so much on spot freight. Instead, they prioritized making use of existing relationships with brokers and 3PLs to secure longer-term contracts.
Meanwhile, the capabilities of AI-powered technologies were increasing and making a positive impact. Repetitive, once-manual tasks were automated, allowing everyone in the industry to devote more of their time toward growing their businesses.
Much to everyone’s delight, consumer spending then reached an all-time high by the end of 2024. Inflation also settled down, and the future of the economy became a bit clearer.
Finally, necessary capacity adjustments also happened. Many struggling carriers that had joined during the freight boom in the late 2010s were gone; some sold their businesses, while others went under, reducing the oversaturation of carriers. As a result, there was a healthier alignment of supply and demand.
Has the Freight Recession Ended?
This question was first explored by FreightWaves in November 2024. They, along with a few other media outlets, came to the conclusion that the recession had officially ended with plenty of positive trends as evidence. For instance, they cited increasing spot rates (signaling increased demand, particularly in e-commerce sales), continued removal of excess capacity, and rising tender rejections as reasons behind the conclusion of the recession.
However, others do not believe that the recession is over. Factors like supply and demand inequality, spot rate volatility, and persistently high operating costs indicate that the effects of the recession are still being felt. Additionally, while inflation has slowed down, the Fed has recently halted interest rate reductions, making the long-term economic forecast unclear.
According to altLINE’s Freight Factoring Operations Manager Jennifer Lockett, the freight recession’s impact has, at the very least, bottomed out.
“The recession has likely gotten as bad as it’s going to get,” Lockett said. “However, we in the industry are still trying to recover or get some semblance of normalcy back. It’s a hard uphill battle to recover from because of the damage the recession did–and by damage I mean companies changing shipping habits, carriers being scammed and put out of business, [and] debtors [getting] behind on payments.”
Lockett pointed out the impact that tariffs will have on the recovery process as well. Considering global tariff rates are predicted to increase by a staggering 21%, there’s still significant uncertainty regarding the status of the recession and the recovery.
“The tariffs are making it harder to recover than a typical recession would since shipments are down at the ports,” Lockett added. “If manufacturing picks up in the U.S., it will take a bit for that shift to happen.”
All things considered, trends are undoubtedly more promising in 2025 than they were from 2022 to mid 2024. And it’s important to remember that figures often don’t return to the pre-recession climate once a recession has ended, so we can’t wait for operating costs to return to what they once were to proclaim the recession has ended because that may never happen.
Instead, we can identify the positive momentum within the industry over the past year as an indication that the worst of the recession is over and we are now on the recovery upswing.
How the Industry Will Continue to Recover
Business owners impacted by the recession can lighten the burden during the recovery period by more carefully analyzing their finances and operations. For carriers, knowing how to find the highest-paying loads has become much more crucial.
To maximize recovery efforts, trucking professionals overall need to:
- Build strong relationships with business partners: Having recurring work from a trusted partner can go a long way in stabilizing cash flow and avoiding worst-case scenarios should market conditions make it tough to find new business.
- Stay informed: It’s no secret that spot rates and fuel prices shift daily, and with the ever-changing economic outlook and fluctuating tariff rates, it’s more important than ever for trucking business owners to keep an eye on trends. Staying informed can help carriers recognize when they need to adjust operations to better secure their businesses.
- Get creative to maximize profits and improve cash flow: By investing in technologies like accounting software, carefully evaluating areas where spending can be reduced, and exploring alternative financing solutions like freight factoring, businesses can have the peace of mind knowing they’re doing everything in their power to stay profitable.
Per Lockett, spot and market rates may never return to what they once were, so businesses should not operate as if they will.
But from a more optimistic viewpoint, market conditions have, without question, improved over the past calendar year, and there’s more forward progress being made since the recession plateaued. Those in the freight industry can finally stop worrying and start looking ahead.
Michael McCareins is the Content Marketing Associate at altLINE, where he is dedicated to creating and managing optimal content for readers. Following a brief career in media relations, Michael has discovered a passion for content marketing through developing unique, informative content to help audiences better understand ideas and topics such as invoice factoring and A/R financing.
