If you ever wonder why shipping rates fall one quarter and rise the next, the answer is supply and demand. When freight volumes outweigh the number of available trucks, rates climb. When trucks outnumber available loads, rates go down.
However, as Shaker CEO Jason Smith discussed in our 2025 Freight Market Update, the transportation industry is more complex than this balance of freight and trucks alone. The typical market patterns have been disrupted for the past several quarters, causing less freight to circulate, so shippers have been experiencing shipping costs that are lower than usual. However, these conditions could change suddenly, leaving shippers to rethink their transportation budgets at the last minute.
This extended “freight recession” has made experts hesitant to predict outcomes, so it’s important to understand what moves the freight market and how you can be prepared for potential market shifts.
The Supply
The capacity to move goods, which can be understood as the number of trucks on the road, is the freight market’s supply.
A true measurement of truck capacity is hard to pin down because the number of carriers in business isn’t always indicative of the number of trucks on the road. For instance, a small trucking company merging with a larger company reduces the number of operating carriers, without changing the actual number of trucks on the road. This makes it impossible to estimate capacity on numbers alone.
Generally, truck capacity dips during major holidays, when many drivers take vacation time, and surges around peak seasons to meet rising demand.
The Demand
In this equation, demand equals the volume of freight that needs to be moved. Anything from consumer spending to labor strikes to trade policies can cause freight volumes to surge or stagnate.
In a normal year, demand plays a part in leading truck capacity. New carriers open for business to meet increased freight volume. On the flip side, when volume decreases, so can capacity as the small, newer trucking companies slow down and go out of business.
However, CEO of Shaker Logistics, Jason Smith, says transportation hasn’t had a normal year since 2020:
“The lingering surplus of capacity that rose during the pandemic, combined with today’s economic uncertainty caused by international trade negotiations, has created a ‘loose’ market. In these conditions shippers generally pay lower rates to move their products. I caution shippers against getting too comfortable with these rates. A shift in the market could blow up your budget or routing guide if you’re not ready to adapt. Shaker is closely watching every minute factor that could impact the market so we can prepare ourselves, and our shippers, for anything that comes.”
Other Factors that Move the Market
Weather: Natural disasters, extreme winter storms, and heat waves can cause dips in capacity as roads close and drivers face unnavigable conditions.
Global supply chain: Trade disputes, port congestion, and labor shortages can impact the flow of goods, reducing freight volumes across the board or on a country-to-country basis.
Operating prices and regulations: When the price of diesel fuel spikes or new environmental regulations are launched, the cost of operating a truck can increase, causing higher rates for shippers.
Peak seasons: Produce season or pre-holiday rushes cause surges in freight volume, and trucks will leave their typical territories to chase the freight. This typically increases rates for shippers.
Reading the market in real time
With so many moving pieces, it can be difficult for shippers to forecast the state of the truck market and monitor other aspects of the supply chain at the same time. However, there are some things shippers can do to get a sense of where the market is headed:
- Take note of spot quotes: Consider the spot quotes that carriers or 3PLs return. If the rate is higher than you anticipated, it could signal that the freight market is getting busier. If the rate is lower than expected, it might be a sign that there’s less freight volume available and the market is slowing down.
- Watch your routing guide: If carriers or 3PLs on your routing guide start rejecting tenders, it could be because they’re finding higher-paying freight elsewhere. This could indicate an increase in freight volume or a decrease in capacity, when carriers can afford to be choosier.
- Partner with an experienced 3PL: A shipper can make observations in their own transportation department, but a 3PL adds critical perspective and expertise to help shippers see market changes sooner and plan accordingly.
“A shipper likely doesn’t have the time or resources to analyze the market in the same capacity that a 3PL can,” said Jason. “For example, Shaker has decades of industry knowledge informing our predictions, our fleet and carrier partners act as our eyes on the road, and we invest thousands each month in AI enhanced software to help us read the market.”
These market intelligence tools analyze data about specific lanes, regions, equipment types, and freight to produce insight at a granular level. The market itself isn’t homogenous, and it takes industry-specific expertise and experience to accurately assess the market. For example, the capacity patterns in Florida might be wildly different from those in California at any given time, and similar differences can be found across the dry van, reefer, and flatbed markets.
With decades of experience in logistics, Shaker’s team has seen lots of fluctuations and knows what lanes and modes are more volatile or costly. We can distinguish between a true market indicator or a niche situation in a specific industry that might not indicate broader freight market movement, so we know when and how to prepare our customers to insulate them from the major impacts of a market shift.
Partner with an industry expert for smooth transportation in any market
No single shipper can control diesel prices, driver availability, or global trade disputes, but the right 3PL can help you respond effectively to these changes. Shaker’s carrier network, analytic tools, and decades of experience can help shippers make more informed decisions. Reach out to our team today for a logistics partner that can help you move ahead in any market.