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Trucking capacity shrink could drive multi-year freight recovery
RXO’s Jared Weisfeld estimates 20% to 25% of for-hire truckload capacity could exit as enforcement tightens and operating costs rise about 26%.
FreightWaves, citing an interview with RXO Chief Strategy Officer Jared Weisfeld, said the trucking market is moving into a multi-year recovery rather than a short-lived cyclical rebound. The core driver, Weisfeld argued, is a supply-driven correction tied to government-enforced capacity reduction.
He pointed to roughly 12 months of enforcement actions affecting non-domiciled CDL requirements and English language proficiency, along with CDL mill crackdowns, ELD rules, and cabotage rules. Weisfeld described these efforts as the largest structural change since deregulation in 1980.
Weisfeld estimated that as much as 20% to 25% of the for-hire truckload market’s supply base may exit, calling the scale far from trivial. He also said spot rates have been running 30% to 50% higher year over year in periods despite what he characterized as muted demand.
The interview highlighted tender rejection rates as additional evidence, noting that rejections fell from the July 4 holiday period but remained around 13% at the time, described as multi-year highs. Weisfeld said a widening cost-to-operate gap is making it difficult for capacity to re-enter quickly, with operating costs up about 26% while all-in rates, including fuel, near parity with the first-half 2022 peak.
Higher financing costs further compound the challenge, with Weisfeld pointing to near 7% 30-year mortgage rates as an example of how expensive new fleet formation or new starts can be. He said traditional cycle analysis may not fully apply given the structural nature of the capacity shift.