Staying Profitable in Freight Recessions 

The freight industry is a critical part of the economy, and it’s not immune to a recession. So far in 2025, the industry is experiencing softer load volumes, higher operating costs, and increasingly tight competition. Whether you’re managing a fleet or driving your own rig, you need to focus on boosting profitability. While the current conditions might seem ceaseless, freight recessions are common and always end.  

What remains unknown is how long the current recession will last. The yo-yoing United States tariffs have caused import orders to plummet, and there are no guarantees for increasing shipments on the horizon. For example, the Port of Los Angeles expects a significant drop in incoming cargo volume as the tariffs take hold in China. With the right freight recession strategies, you can navigate downturns and set your business up for lasting success.

What is a freight recession?

As of March 20, 2025, the freight industry has seen 13 straight quarters of decline, leading to an extended recession. A freight recession happens when services exceed demand for an extended period. With fewer products shipping out, freight companies might experience slim margins, declining rates, and even freight layoffs. More freight companies competing for the same jobs means that staying successful and profitable is harder.

While recessions can occur due to a decline in the overall economy, they can also happen when the economy is doing well. Sudden excess inventory, changing consumer behaviors, or too many people in the freight industry can all trigger a recession.

What causes a freight recession?

A freight recession can happen during economic recessions or due to industry-related changes. It’s common to see freight recessions due to:

• Excess inventory: If manufacturers or retailers overstock, they halt orders. With no goods moving, freight stalls.
• Overcapacity: During high-demand periods, operations may invest in new trucks to meet the market. When demand falls, companies are left with more trucks than freight.
• Consumer demand: Inflation, high interest rates, and economic recessions can decrease consumer spending. Less spending means reduced shipments and freight profits.
• Seasonal cycles: The holidays and other peak shipping seasons increase freight. Once they’re over, demand slows, which can create a freight recession.
• Fuel price changes: High fuel prices drive up operating costs, reducing profits. Small carriers and owner-operators face leaner conditions and a higher risk of business failures.
• Economic policy: Government policies or uncertain conditions can lead to a decline in incoming freight.

When you’re able to spot the potential signs of a freight recession, you’re able to prepare. Carriers and brokers can adapt more quickly to the freight cycle to maintain profits and avoid poor business decisions.

How freight recessions impact trucking businesses

Freight recessions impact every corner of the freight industry. Trucking businesses must know what to do when freight rates are down, and understanding the potential impacts helps them resist downturns.

Owner-operators and small carriers struggle the most during recessions. Larger operations can initially absorb low rates, but smaller companies are more at risk. Market rates might fall below your cost per mile, turning each load into a financial risk. Fuel maintenance, loan payments, and insurance cost money even when you’re not making any, and it’s sometimes difficult for smaller operations to stay afloat without burning through their savings.

Midsized fleets have an easier time managing cash flow, but they see more idle drivers and equipment. It’s more difficult for them to renew contracts profitably, and load boards have become more competitive. The largest operations often experience reduced efficiency and may face potential hiring freezes or layoffs.

Meanwhile, freight brokers face intense competition. Customers will expect higher quality service at lower prices. Since everyone is competing for their freight, it’s easier for customers to extract better deals for themselves. Freight brokers might experience reduced load volumes or longer payment terms as they balance the relationship between carriers and shippers.

Larger industry trends

While every business sees different effects based on its size, some common recession trends affect all businesses. You’ll need to be prepared for:

• Declining revenue: The first signs of recession are declining revenue and rate compression. Too many trucks chasing the same loads may lead to small margins and trouble making a profit.
• Poor driver retention: It’s common to see driver retention issues. Too many drivers lead to fleets cutting hours or delaying pay. Drivers begin to look to the competition for work, and losing an experienced driver can affect your efficiency and quality.
• Cash flow issues: As insurance, fuel, and maintenance costs remain the same, businesses will struggle to maintain their cash flow.
• Bid wars: Carriers will begin to engage in bid wars and rate undercutting. Larger companies can handle smaller profits more easily at first, so they might start undercutting other businesses that cannot compete with extremely low rates.

How to stay profitable during a freight recession

Just because recessions make the industry challenging doesn’t mean you can’t profit. Recessions may reduce freight demand, but you can invest in a solid shipper, carrier, or freight broker recession strategy to make your operation successful. Here are some of the best strategies for trucking in a recession,

1. Focus on smart cost-cutting.

As profit margins shrink, carriers, brokers, and shippers need to control costs. However, avoid implementing sweeping cuts that limit quality and safety. If you cut costs too low, your reputation will suffer and might not recover when the recession ends. You need to be smart about cutting corners. Look for waste. Start with fuel, one of the most variable expenses. Even small fuel efficiency improvements will lead to fleet savings. 

Cut costs around fuel with:

• Route optimization: Use route optimization tools to cut out empty miles, avoid traffic jams, and find the most efficient routes. These tools make it easier to purchase cheaper fuel and avoid wasting it.
• Maintenance: Your fleet requires regular maintenance to stay efficient. Poor maintenance leads to downtime, breakdowns, and expensive repairs. Plus, dirty filters and worn systems use more fuel. You’ll keep repair and fuel costs down with routine maintenance.
• Downsizing: If you can, consider downsizing your fleet. Unused trucks and trailers simply sit around, wasting space and maintenance costs. Selling unused equipment reduces overhead, cuts insurance costs, and frees up cash.

2. Improve efficiency.

Efficiency is a major influence on your success. If you can offer your services more efficiently than the competition, you’ll save money and resources while retaining clients. Try to support practices that make your team more efficient, like:

• Consolidating loads: More loads require more trips and higher expenses. Consolidate loads to maximize efficiency and trailer space.
• Dispatching software: Use dispatching software to keep drivers informed, reduce deadhead miles, and make loads more visible.
• Good communication: When recessions bring uncertainty, you need to be rock-solid. Communicate expectations, deliver loads on schedule, and stay in touch with clients. The better you communicate, the better your reputation, and the less time you spend chasing loads.

You can even use the downturn to renegotiate vendor and customer terms. You can get better fuel rates, lock in more consistent freight, or adjust payment terms. Look at less-than-truckload (LTL) opportunities to fill gaps in your truckload volumes. The more you tighten up, the greater your profits.

3. Prioritize customer relationships.

Customers are critical to your success during freight recessions. Operations without strong networks must compete for open loads. If you have a stable client base, you have loads. Shippers often become more selective during downturns, so outperforming the competition and staying reliable gives you an edge.

Focus on your best shippers, and don’t strain your operation with unreliable partners. Prioritize loads from partners who pay well and on time and who value your service. It’s easier to maintain profits when you’re not seeking out new, uncertain business. Make sure you’re communicating pickup and delivery windows, sharing status updates, and resolving issues quickly. This makes you a more appealing partner for customers. 

4. Diversify freight sources.

While you need strong relationships, avoid relying on a single freight source. During recessions, any business could go down. If you’re only relying on one source, their going out of business could severely impact your operations. Instead, diversify your freight with contract and spot freight to stay stable and flexible. Get your predictable income from contract loads, and use spot loads to hit those short-term rate spikes.

Some freight sectors are more stable than others. Intermodal, refrigerated goods, and flatbed sectors are relatively steady. Customers also almost always need rail support and construction or agriculture. These areas will see fewer shortages during freight recessions. Make sure you can meet their requirements so you can generate revenue.

Consider partnering with direct-to-consumer brands or bidding on government contracts. These partnerships can fill gaps in your freight operations. There are sources of high-quality loads out there. You just have to find them.

Using technology for freight recession survival

Technology offers a great way to maximize freight recession profitability. When every saved dollar or successful delivery counts, you need tools to make operations more efficient. Technology closes your efficiency gaps and helps you find new opportunities for your business. With a transportation management system (TMS), data analytics, and electronic logging devices (ELDs), you can achieve success. 

1. TMS and load board

A TMS and load board can simplify load matching, dispatching, and invoicing fees. You get more time to focus on making your business better. With a load board, you can access high-quality loads faster. The result is fewer deadhead miles and greater profits without requiring more time. 

2. Data analytics

Data analysis takes your efficiency further and lets you track load profitability by lane, customer, or equipment type. This data helps you make more informed decisions about where to continue to invest your time and when to walk away. Analytics will also highlight patterns in your business that you might miss in your day-to-day observations. They can show you long-term patterns, such as certain lanes or partners that yield better margins. Double down in these areas or pivot to more profitable ventures. 

3. ELDs

ELDs and telematics systems give you direct insight into your operations. They monitor idle time, driver behavior, and fuel use. With this data, you can make safety and efficiency improvements and implement more efficient methods for moving freight and saving money.

4. AI tools

Artificial intelligence (AI) tools can also provide assistance. These tools use predictive pricing models and smart load recommendations to support your business. They can find patterns humans might miss, resulting in an efficiency-focused company that uses strategies based on real data.

Tips for freight recession recovery

While you need some strategies for weathering a recession, knowing how to overcome freight recessions when the market rebounds is also important. While it might feel like the recession is endless, the market will recover, and the businesses that survive downturns are in the best position to thrive once conditions improve. If you can weather the storm, you should create a recovery plan. Here are some tips for starting a freight recession recovery strong:

1. Protect your cash flow: Make sure you build enough cash reserves to support you through lean times. More cash flow means more flexibility when the market swings up.
2. Make long-term investments: Prioritize technology, partnerships, and equipment that will support you in the long term. While it might seem easier to make short-term gains, beating a recession is about playing the long game.
3. Focus on efficiency: Use the downturn to make your business more efficient. Cut out waste and carry these practices through better times. When you strengthen your operation, you set yourself up for success.
4. Invest in drivers: Good drivers are hard to find. While freight recessions mean there are more drivers than freight, you should still invest in your team. Cross-train drivers, improve communication, and help them stay motivated. Skilled, loyal drivers bring in more profits than detached, burned-out teams.

Be ready for anything with Truckstop.

Staying profitable in a freight recession takes more than determination. You need to have the right tools to support your business. With solid data and consistent access to loads, you can keep your business profitable. Truckstop is your partner in handling the ups and downs of the freight industry.

With the Truckstop Load Board, you get access to high-quality loads across the country. Our load board helps you reduce deadhead miles and maximize every haul, all from one location. Plus, we offer Truckstop Go™ for mobile convenience and Truckstop Rate Insights to see the latest pricing trends. Whether you’re a carrier, broker, or shipper, Truckstop provides the visibility you need to stay efficient while adapting to the markets. 

Take control of your freight future and request a demo online to see why Truckstop is the most trusted name in freight.