The trucking sector’s conditions notably improved in November, driven by stronger freight rates and capacity utilization, according to FTR Transportation Intelligence.
FTR’s Trucking Conditions Index rose to 2.14 from the October 0.89 reading. The TCI tracks five key elements of the U.S. trucking market: freight volumes, freight rates, fleet capacity, fuel prices and financing costs. Positive readings signal favorable conditions, negative readings reflect challenging conditions, and values near zero indicate a neutral environment.
Avery Vise, FTR’s vice president of trucking, noted, "The latest available data indicates a substantial reduction of trucking capacity over the past year, a conclusion supported by stronger spot market rates than trend over the past month or so. It’s quite possible that capacity has bottomed out, so the attention now is squarely on freight demand, which still looks sluggish with both upside and downside potential."
“Trucking companies cannot get to sustained margin recovery on capacity reductions alone," Vise said.
Recent weak manufacturing activity aligns with Vise’s observation of sluggish freight demand.
Institute for Supply Management’s latest Manufacturing PMI Report, which measures the health and activity of the U.S. manufacturing sector, registered 47.9% in December, marking the lowest point of 2025 and the 10th consecutive month of contraction.
Three main demand areas, including new orders, backlog of orders and new export orders, saw improvements. However, indices still pointed to contraction similar to previous months.
“Several consecutive months of gains in these indicators are necessary for a longer-term recovery,” said Susan Spence, chair of the ISM Manufacturing Business Survey Committee.
Surveyed panelists said the primary factors contributing to apprehension in the coming year include low consumer spending, tariffs, and depressed business activity.
An executive from the transportation equipment sector said, “Many customers are ordering for 2026, but those orders are 20% to 30% below their historical buying patterns. Some large fleets are still completely on hold for 2026, with zero capital expenditures money available to fleet budgets.”
Industry sentiment suggests the first half of 2026 is likely to be another period of weakness, the exec noted. Expectations are now pinned on a potential rebound in the second half, even as the North American truck fleet continues to age.
S&P’s December manufacturing PMI report offered a similar outlook as new orders declined, though employment growth strengthened. Tariffs continued to push prices, it noted.
“The gap between growth of production and the drop in orders is in fact the widest seen since the height of the global financial crisis back in 2008-2009. Unless demand improves, current factory production levels are clearly unsustainable,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
Jason Miller, a professor of supply chain management at the Eli Broad College of Business at Michigan State University, said unless new orders post an unexpected upside in January, manufacturers appear to be entering the year in a weaker position than at the start of 2025.
Historically, sustained expansions in trucking freight demand have been accompanied with strong, consistently positive new order readings, Miller explained.
In the absence of such indicators, Miller noted that meaningful growth in trucking freight demand over the next two quarters appears unlikely.
