State of Freight: October 2025
It’s spooky season, and the economy showed up dressed as 3 different freight cycles at once.
Some regions are sprinting ahead like it’s 2018, others are limping along like 2023 never ended, and then there’s the South, clutching its foot like it stepped on a pile of Legos.
Let’s break it all down in this month’s Freight Market Update, brought to you exclusively by the transportation nerds we keep locked in our basement.
Manufacturing's staggered recovery
Imagine the U.S. industrial sector as a 4×400 relay. Philly’s rounding the first turn with a full head of steam. Richmond hasn’t left the blocks.
- The Philadelphia Fed index surged 23.5 points in September, hitting +23.2, its best performance since January.
- Meanwhile, Richmond collapsed to -17.
- National ISM PMI remained stuck in contraction at 47.2 for the 7th month in a row.
And yet, forward expectations are rising. Not just in the hopeful regions, but everywhere:
- Philly’s 6-month outlook: +31.5
- Dallas: +24.8, despite current declines
- Richmond: barely positive, but better than last month
That optimism isn’t coming from vibes alone. It’s coming from Capitol Hill.
The grass is greener in 2026
Next year’s tax code is freight-friendly in a way 2025 never was. The big policy package passed this year supercharges domestic manufacturing:
- Full expensing for equipment and production facilities
- 35% semiconductor tax credit
- Continued R&D deductions and pass-through relief
If you’re a manufacturer and you’re not planning to spend money next year, your CFO might be asleep at the wheel.
And spending leads to freight. Capital investments mean equipment orders. New buildings mean construction materials. And new production lines lead to higher volume (sustained, heavy, industrial volume).
Open sesame
You can’t talk recovery without talking capacity, and right now, the gate to growth has three locks:
- Labor. The driver pool isn’t getting any younger. FMCSA’s tightened rules around non-domiciled CDLs have added a speed bump the size of a Jersey barrier.
- Capital. Fleets can’t grow if they can’t borrow. Banks are tight, insurance is up, and factoring is eating into already slim margins.
- Profitability. Spot rates are still below break-even at $1.66/mile vs. $1.83 estimated cost. No one’s buying trucks to lose money.
Larger carriers survive because they have a safety net: contract freight paying $2.03/mile. But for spot-only operators, every load is a slow death by diesel.
The spot market is still crawling
September gave us a tiny lift in spot linehaul (just 2 cents), which is now sitting at $1.66. That’s up 4% year-over-year, but still 9.3% under the cost floor.
The bigger story is what didn’t happen. Diesel moved 8% over six months. Linehaul rates didn’t flinch. Fuel surcharges covered the swing, but base rates stayed locked in a range that signals weakness.
The CDL exodus
If you’ve been ignoring FMCSA’s non-domiciled CDL policy, stop.
Roughly 200,000 drivers are affected over the next 24 months. How many exit the industry? Depends.
In the most likely case, we lose 61,000 of them, about 12% of the OTR base. That means carriers will spend 2026 and 2027 just climbing back to today’s capacity level.
In the worst case, it’s nearly 100,000 drivers gone. Capacity wouldn’t recover until the decade turns.
The ocean floor
Imports aren’t booming, but they’ve stopped cratering. Container volumes are stable-to-slightly-rising. And spot rates are down big:
- West Coast lanes have dropped 73% from last year.
- East Coast is down 50%.
That’s good news for shippers. But don’t mistake cost relief for demand strength. This is more “coasting” than “comeback.”
The consumer confidence paradox
The U.S. economy is in a weird “low-hire, low-fire” mood.
Hiring is sluggish. Layoffs are creeping. And yet, consumer confidence is ticking up.
What gives?
Turns out, people are spending, but they’re just not buying things that move in a trailer.
Spending is shifting to services: concerts, vacations, dining, wellness., anything to make them forget real-world events. That’s great for the experience economy.
But unless your box truck delivers massages (someone should get on that), freight’s not seeing much benefit.
The final grade
This market’s not hot. It’s not cold. It’s not even mid. It’s just existing.
The freight market doesn’t need a boom to shift. It just needs a heartbeat. But with shippers still shopping around for bargains and fleets reluctant to expand, we’re stuck in a cold war of hesitation. Everyone’s waiting for someone else to blink first.
If you’re betting on recovery, don’t watch volumes; watch response time. The lag is the signal. By the time the spot market heats up, it’ll already be too late to add trucks.
Grade: C+. Enough to keep your parents off your back, but not enough for them to brag on you at the next family function.
