The Freight Recession & Rate Collapse: How Rock-Bottom Rates Are Reshaping the Market

We're living through the longest, most brutal freight recession in modern history. It's been nearly two years of rock-bottom rates, and frankly, it's reshaping everything about how this industry operates.

If you're in trucking right now, whether you're an owner-operator barely making ends meet, a carrier watching competitors fold, or a shipper wondering why service seems inconsistent, this downturn is affecting you. Let's break down what's really happening and why this recession feels different from anything we've seen before.

The Numbers Tell a Brutal Story

This isn't your typical 12-18 month market cycle. We're now 13+ quarters deep into this freight recession, making it the longest downturn on record. That's over three years of sustained pressure on rates and capacity.

The spot market has been absolutely demolished. Throughout 2023, both spot and contract rates fell together, something that doesn't usually happen. Typically, contract rates provide some stability while spot rates fluctuate. Not this time. Shippers got aggressive, rebidding contracts lower and pushing more freight to the spot market to squeeze every penny they could.

By early 2025, we saw something really unusual: spot rates actually fell below contract rates. The average dry van contract rate hit around $2.43 per mile while spot was sitting at just $2.04. That $0.39 spread meant shippers had zero incentive to sign contracts when they could get cheaper rates on the spot market every day.

Many small fleets and owner-operators have been running loads at or below their actual cost per mile. That's not sustainable, that's a recipe for bankruptcy.

How Did We Get Here?

Too Many Trucks, Not Enough Freight

The root cause? We're still dealing with the hangover from the pandemic boom. In 2021, everyone thought freight would keep growing forever. New trucking companies popped up everywhere, brokerages multiplied, and existing fleets added capacity like there was no tomorrow.

Turns out, there was a tomorrow. And it looked nothing like 2021.

Consumer spending shifted from goods back to services (restaurants, travel, entertainment). Ocean freight slowed down, eliminating the spillover opportunities that used to help fill trucks. Meanwhile, all those trucks from the boom years are still out there, competing for fewer loads.

Operating Costs Stayed High

Here's the kicker: while rates collapsed, operating costs didn't. Fuel, maintenance, insurance, and labor costs have remained elevated. So carriers are getting paid less while their expenses stayed the same or even increased.

It's basic math, if your revenue drops 30% but your costs only drop 5%, you're in trouble.

The Bankruptcy Wave

The human cost of this recession is staggering. Owner-operators are filing for bankruptcy at rates we haven't seen in decades. These aren't fly-by-night operations, these are experienced drivers who've been in business for years, sometimes decades.

Brokerages Are Dropping Like Flies

In July 2024 alone, 284 brokerages shut down. That's not a typo, 284 in one month. Compared to August 2023, the total number of brokerages dropped by 3,420, roughly a 13% decline.

Most of these were post-pandemic entrants who jumped in during the good times but lacked the operational expertise to survive when things got tough. They were competing primarily on price, which works when capacity is tight but becomes a death sentence when capacity is abundant.

New Motor Carriers Aren't Making It

New MC numbers are shutting down within 6-12 months on average. Think about that, people are investing their life savings into trucks and businesses, only to discover they can't generate enough revenue to cover their costs within their first year.

The barriers to entry in trucking are low, but the barriers to profitability have never been higher.

Carriers Are Fighting Back

Fleet Right-Sizing

Smart carriers are aggressively cutting capacity and dumping unprofitable customers. They're parking trucks, selling equipment, and focusing on the lanes and customers that actually pay decent rates.

This isn't just cost-cutting, it's strategic survival. Carriers are finally saying "no" to freight that doesn't make financial sense, even if it means smaller fleets and lower overall revenue.

Getting Pickier About Freight

The days of taking any load at any rate are over for carriers who want to survive. They're analyzing which customers, which lanes, and which types of freight actually generate profit, and they're walking away from everything else.

This creates service disruptions and capacity constraints in certain markets, but it's the only way carriers can achieve sustainable operations.

Signs of Recovery (Maybe)

By mid-2025, we started seeing some green shoots. Spot rates ticked up from their historic lows, though contract prices remained flat. Tender rejection rates increased slightly, meaning carriers were finally turning down loads they couldn't run profitably.

Capacity continues leaving the market through bankruptcies and fleet downsizing. At the same time, consumer spending is gradually shifting back toward goods, which should increase freight demand.

But Don't Get Too Excited Yet

The rate increases we saw in early 2025 weren't driven by demand: they were driven by carrier discipline. Basically, carriers decided they'd rather run fewer loads at sustainable rates than more loads at losing rates.

Contract rates typically lag spot rates by 1-2 quarters, so even if the spot market recovers, contract customers won't feel it immediately. Full market recovery will likely extend into late 2025 or beyond.

What This Means for Different Players

If You're an Owner-Operator:

• Focus on direct relationships with shippers who value service

• Consider lease-purchase programs with established carriers instead of going it alone

• Have multiple revenue streams (don't rely solely on freight)

If You're a Carrier:

• Be ruthless about unprofitable freight and customers

• Invest in technology and efficiency to lower operating costs

• Build strong relationships with shippers who understand the value of reliable capacity

If You're a Shipper:

• Don't assume rock-bottom rates will last forever

• Build partnerships with carriers who provide consistent service

• Consider longer-term contracts with carriers you trust

The Road Ahead

This recession is fundamentally changing how the freight industry operates. The easy money and loose capacity of 2021 created unsustainable business models that are finally being exposed.

The carriers, brokers, and owner-operators who survive will be leaner, more efficient, and more focused on profitable operations. But the transition is brutal, and we're not through it yet.

What's Different This Time

Unlike previous downturns, this one has been characterized by sustained oversupply rather than temporary demand drops. The capacity that entered the market during the pandemic boom was massive, and it takes time for that excess to work its way out through bankruptcies, fleet sales, and business closures.

The recovery will likely be gradual rather than sudden. Don't expect a return to 2021 rates: that was an anomaly. Instead, expect a slow grind back to sustainable rate levels that allow carriers to operate profitably while still providing competitive pricing for shippers.

Bottom Line

The freight recession and rate collapse of 2022-2025 will be remembered as a turning point for the industry. It's forcing everyone to operate more efficiently, make smarter decisions, and focus on sustainable business models.

If you're still in business at this point, you're doing something right. The question is whether you can hang on long enough for the market to stabilize and recover.

The industry that emerges from this recession will be different: smaller, more efficient, and hopefully more profitable for everyone involved.