While capacity has tightened compared to last year’s oversupplied conditions, analysts suggest the market remains fundamentally loose. Any meaningful shift toward tightness will require substantial demand growth.
Tariff policy remains a wildcard for demand, and the industry faces a difficult environment as flat rates persist. As Q1 2026 kicks off, analysts recommend cautious observation and gradual adjustment.
Regulatory enforcement as significant capacity factors
Analysts note regulatory enforcement, particularly around non-domiciled CDL holders, as a risk. Mazen Danaf, senior economist at Uber Freight, stated, “If it ultimately takes effect, it could materially affect capacity in 2026. However, because it’s still being challenged, it’s something shippers should scenario-plan around rather than assume as a base case.”
[Related: USPS to remove unvetted non-domiciled drivers from trucking fleet]
Ken Adamo, chief of analytics at DAT Freight & Analytics, suggested that impact will be localized. Because magnitude of the impact is difficult to pinpoint, Adamo noted that trucks will likely be harder to source on specific routes or in certain parts of the country—for example, long-haul reefer lanes out of California or Texas.
Adamo added that enforcement affects compliant carriers and drivers as well: “They may not make themselves available on lanes with heavy enforcement because they don’t want the hassle or risk of delays, even though their trucks and drivers may be perfectly in order.”
There is a consensus that while capacity has improved from extreme oversupply, it remains loose. Danaf expects capacity to remain tighter in the first quarter of 2026 than during the same period last year, even if the usual seasonal softening occurs after the holidays. Adamo anticipates normal seasonal attrition without dramatic changes.
David Spencer, vice president of market intelligence at Arrive Logistics, noted that heightened regulatory scrutiny will likely result in some capacity attrition, adding “another layer of complexity.” However, Spencer noted that the impact should be manageable during the slower demand period typically seen in mid-to-late Q1.
Flat-rate environment: the real challenge
The persistence of flat rates is particularly difficult, according to analysts. Adamo emphasized the pain of stagnation: “The national average linehaul van rate has been nearly unchanged over the last three years—$1.66 a mile in 2025, $1.62 in 2024, and $1.63 in 2023. The real risk to carriers is another year of flatness.”
He noted, “Flat is the toughest environment because there’s only so much you can do to create wins and build your business.” Danaf also pointed out that spot rates remain “well below the operating costs of trucking per loaded mile,” indicating the market hasn’t yet reached true balance.
Tariffs as a major demand driver
Tariffs continue to be a wildcard. “A legal or policy shift could trigger a pretty chaotic quarter for shippers,” Adamo said. If tariffs are overturned or altered, he noted that a pull-forward of imports could drive freight volumes, similar to last year. Additionally, he noted that business investment—especially in sectors like data centers and infrastructure—has been a reliable source of freight.
Uber Freight’s baseline view for Q1 is seasonally softer demand, though they observe resilience in cross-border freight, particularly U.S.-Mexico trade. Danaf explained that shippers “appear to be adjusting to tariff complexity rather than pulling back volumes.”
Demand will hinge on key drivers such as manufacturing activity, housing, consumer retail spending, and inventory replenishment, Spencer said. Additionally, greater tariff certainty, updates to North American trade agreements, or further interest rate cuts could support demand.
He added, “A large government stimulus package, including direct payments to consumers, could also spark demand. But while this has been discussed, there is currently no clear indication of if or when it might occur. Without meaningful demand growth, it is difficult to envision a scenario in which a sustained market disruption takes hold.”
Adamo concluded that structural indicators—such as persistent carrier exits, sustained spot rate strength beyond weather events or holidays, and brokers struggling to find carriers willing to accept unprofitable rates—are the key signals of market equilibrium. “When those things start stacking up, it’s a signal that we’re moving toward a more balanced market,” he said.
