The Great Freight Recession began in April 2022 and lasted for a full three years. We only began to see glimpses of a turnaround in the second semester of 2025. In that time, capacity cratered, rates collapsed, thousands of carriers filed for bankruptcy or left the market, insurance costs skyrocketed, and fuel and financing costs rose. We only began seeing the light at the end of the tunnel around the second semester of 2025. While we’ve already poured over the reasons for the freight recession ad nauseum, let’s go through some of the reasons for the current freight comeback.
We’re in the middle of a “perfect storm” of conditions that are driving up freight costs. Here are the major ones.
Government crackdown on illegal drivers on the roads:
- The Trump Administration is making major headway clearing the roads of illegal aliens, non-compliant drivers, and those who can’t read or speak English by going after the states who are issuing those drivers’ licenses. States that haven’t been put on notice are already self-correcting, ie. OH has already revoked non-domiciled or visa-holders’ licenses or will not be renewing once they expire. This has had a two-fold effect of creating safer roadways while leaving more freight for remaining drivers.
Court cases:
- A major recent court case (Montgomery vs. Caribe Transport II) has sent shock waves through the freight broker universe as the Supreme Court decision held that brokers are not immune to liability in cases of litigation regarding carrier fault in critical injuries, fatalities, cargo loss, etc. Put simply, brokers can be sued and held financially liable if they book with carriers that have less-than-stellar safety records. This signals an end to the days of risky, bottom-dollar load bookings as brokers will have to decide if booking with that cheap carrier with a conditional safety record, or with no record, is worth the savings. If carriers with poor safety records can’t book spot freight that will eventually push them out of the market, leaving more freight for reputable companies with good records, like Marvin Keller. The safety effects of this will ripple through the industry, creating safer roadways and potentially lowering insurance rates as good carriers are currently forced to subsidize the insurance of riskier carriers.
Iran conflict:
The closing of the Strait of Hormuz has had crippling effects on the oil, freight and logistics industries. Twenty percent of global oil travels through the strait and traffic slowed by 95% which forced ships to reroute, adding thousands of miles and close to two weeks of transit time to shipments. This has led to higher fuel costs, freight costs, and freight shortages. The higher costs are also putting smaller, less resilient carriers out of business. While we’re paying the fuel premium, that premium is being passed on to customers and brokers, and we’re also seeing increases in linehaul rates due to tightened capacity. Shippers are pulling inventory forward to protect against future shortages during this time of market uncertainty.
While the market will eventually correct itself, we are taking advantage of these changes now in order to make up for some of the losses of the past three years and to ensure a better financial position now before the next downturn. It’s harvest time; we just need to reap as much as we can while conditions are ripe for it.
