Shipper Spend Up 32% as Trucking Enters Supply-Driven Recovery

Shipper spending on trucking jumped 32% year over year in the third quarter while shipments stayed essentially flat — the clearest signal yet that the freight market has turned, according to American Trucking Associations Chief Economist Bob Costello.

The gap is the story. Flat volumes plus surging spend means shippers are paying more per move, and the reason is not demand. It is capacity leaving the market.

Costello delivered his annual economic and trucking update in partnership with U.S. Bank. His verdict: trucking sits at the start of a supply-driven recovery, the first of its kind in modern memory.

"Broadly speaking, the freight market is not super strong," Costello said during the discussion. "You might go, 'I thought he said early on the market has turned.' It absolutely has. But understand it is all around industry supply, and we've never really seen a recovery quite like this."

Why capacity finally fell

The mechanism has two phases. Phase one ran from the pandemic-era bust onward: carriers battled declining rates and high costs, with wages the single biggest expense as competition for qualified drivers intensified. Carriers exited. But not fast enough.

"Capacity absolutely did come down," Costello said. "It's just that you never felt it because it didn't come down enough to meet demand."

Phase two began around spring 2025. That is when enforcement tightened, and Costello calls it the catalyst.

"Then we entered phase two, and phase two started in say, the spring of 2025, and we were getting new and increased driver enforcement rules," he said. "We've had court rulings, we've had high diesel fuel prices, and this has been the catalyst."

The Department of Transportation drove the escalation. Its targets:

• Non-domiciled commercial driver licenses
• English-language proficiency standards
• Driver training schools with concerning track records

Customs and Border Protection is also working with DOT to stop illegal uses of B-1 business-visitor visas.

What does this change for shippers?

Costello laid out the divergence plainly. "For everybody across all regions combined, you can see that shipments are pretty flat, up a little bit in the third quarter year over year, down a little bit year to date," he said. "But look at shipper spending, up quite a bit, 32% in the third quarter year over year."

The squeeze bites hardest in cross-border states. Texas shipments are down 12.9% so far this year, yet shipper spending in the state has climbed 37%. Oklahoma, New Mexico and Arizona show the same pattern, reflecting their exposure to freight moving across the border.

For carriers, that is leverage returning. For forwarders and shippers, it is budget pressure without volume growth to justify it.

The market itself is uneven beneath the macro numbers. Some carriers are doing better than others depending on what they haul and who they compete against. Airplane production and equipment going into data centers are driving factory output. Retail sales and construction show similarly mixed pictures.

"So the good news is the market has turned, and it will continue to turn, I believe, but it's all based on supply," Costello said.

How long does it last?

Costello posed the practical question himself: "So then the question becomes, how long is this market going to last."

His answer: the main threat is a recession, and he does not see one coming. "Even though there's only some pockets of strength overall for the goods economy and so forth, we just don't see that at this point," he said. "It's something we'll watch closely but we don't see a recession on the horizon."

He also expects the enforcement regime to survive political turnover, including the recent midterm elections and the upcoming presidential election, because the initiatives are largely administrative actions tied to safety.

On the equipment side, he sees no capacity surge coming through the dealer channel either. Truck orders and OEM sales are improving, but years of very low replacement rates leave the fleet old and the pipeline shallow.

"If there's any OEMs on this webinar, I know this is throwing salt on a wound," Costello said. "Your sales are definitely improving, orders have improved. But again, we have so far to go because of the very low replacement rates we've been experiencing over the last couple of years. So I don't see that happening, especially when you're talking about qualified drivers."

Barring a recession, Costello expects enforcement-driven capacity constraints to keep tightening the market and pushing shipper costs higher into 2026.