The freight market is tightening again, and this time the driver shortage is back at the center of it. Enforcement actions targeting noncompliant carriers and fraudulent CDL schools are pulling capacity out of the market just as retailers finish front-loading imports ahead of new tariffs.
Meanwhile, manufacturing activity is expanding at its fastest pace in four years, with LTL carriers turning bullish. But the recovery isn’t even across the board: truck employment is holding flat while warehouse jobs keep shrinking.
ACT Research’s June For-Hire Trucking Index showed the freight rate index cooling to 70.2, down 9.5 points from May’s record 79.7, even as the capacity index climbed 1.5 points to 55.0, its highest level in 43 months. Driver availability nudged up to 34.1 from May’s 32.6, still not far off the five-year low of 30.4 hit in April.
New FMCSA rules are doing much of the work: restrictions on nondomiciled CDLs that took effect in mid-March, paired with stepped-up enforcement against ELD tampering and registration fraud, have thinned the pool of available drivers. Only 47% of carriers plan equipment purchases in the next three months, below the 53% historical average, with margins remaining at levels not seen since the Great Recession. As we covered last month, capacity has been tightening for months — this data shows no letup.
Retailers spent the summer racing to beat new tariffs, and it shows in the numbers. June imports at major U.S. ports grew, but well short of the roughly 19% gain once projected, according to the National Retail Federation’s Global Port Tracker. July is now expected to finish lower year over year, a sharp reversal from forecasts calling for an all-time record, with August projected to slip further still.
The timing lines up with the tariff calendar: the Section 122 global tariffs expired in late July, and new Section 301 tariffs took effect the very next day. “We had an early peak season this year as retailers brought in merchandise ahead of tariff changes,” said Jonathan Gold, NRF’s vice president for supply chain and customs policy. “Retailers will be well stocked for the coming holiday season.”
That front-loading, which we flagged back in June as retailers pulled imports forward, means shippers should expect volumes to normalize lower through the fall.
Not every corner of the labor market is moving in the same direction. Truck transportation employment held essentially flat in July, back to February’s level. Warehouse employment told a different story, down nearly 35,000 jobs year over year. Rail employment slipped as well.
“Revisions have erased any sense of a summer rebound in warehousing employment,” said independent economist Aaron Terrazas. Uber Freight principal economist Mazan Danaf noted that carriers are still “actively seeking to expand fleets to capitalize on rising spot rates” despite the regulatory headwinds, while Arrive Logistics’ David Spencer said carriers are prioritizing equipment replacement and driver pay over adding capacity outright.
Demand signals are pointing the other way in manufacturing. July’s Manufacturing PMI hit 55.6, its highest reading in four years, marking the seventh straight month of expansion, with new orders and employment both turning positive again.
LTL carriers are feeling it. Tonnage is climbing at several of the major carriers, with preliminary July numbers showing solid year-over-year growth. ArcBest, XPO, and Old Dominion all outperformed normal seasonal trends, and Saia pushed through a fresh rate increase in early July.
The driver shortage many assumed was gone has returned — largely engineered by federal enforcement. National freight shipments fell 1.1% sequentially and 2.8% year over year in the second quarter, yet shipper spending surged 6.4% quarter over quarter and 28.1% year over year, evidence that rates are climbing faster than volumes.
The carrier population lost more than 50,000 prospects over the past year while only 28,000-plus verified vehicles came online. Spot rates jumped 18.9% in Q2 to $3.02 a mile, up 41.1% year over year, and contract rates rose 13% to $3.06 a mile. The squeeze traces back to enforcement: roughly 10,000 noncompliant CDL schools removed from the federal registry, 27,000-plus drivers placed out of service under English-proficiency rules, and 194,000-plus non-domiciled CDL holders flagged for disqualification.
“The long-haul driver population in the U.S. sits well below long-term averages,” said Schneider President and CEO Jim Filter, adding that this recovery will “last longer than other recoveries.”
Whether capacity is tightening because of enforcement, retailers are adjusting import timing, or manufacturing demand is picking up, shippers need a partner who can flex with the market. VCPB’s over-the-road network keeps freight moving even as driver availability tightens. Our LTL solutions are built for exactly the kind of volume shifts carriers are seeing this summer and our drayage management services help absorb the swings in import timing retailers are navigating right now.
When you work with VCPB, you can always count on:
VCPB Transportation
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(201) 770-0111
