How Uncertainty Defined Trucking in 2025
Industry Leaders Cite Tariffs and Policy Changes as Key Drags
Key Takeaways:
- Tariffs, soft freight demand and shifting trade policy made 2025 a difficult year for U.S. trucking under President Donald Trump.
- Freight volume fell 10% year over year in Q3, with the Southwest down sharply, squeezing margins and delaying equipment and investment decisions.
- Executives expect uncertainty into 2026 as USMCA talks, EPA Phase 3 emissions rules and technology bets shape recovery timing.
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Tariffs targeting key components in automobile manufacturing and a prolonged softness in the freight market were among the major factors contributing to a difficult environment for trucking in 2025.
President Donald Trump entered office with the industry 2½ years into a freight downturn. But his aggressive approach to trade policy, alongside other market disruptions, left stakeholders looking for clarity on a market recovery, investments and equipment.
“This year was marked by significant disruptions that challenged both businesses and the logistics industry,” said Jim Monkmeyer, president of transportation at DHL Supply Chain North America. “Fluctuating tariffs, geopolitical tensions and evolving regulatory policies strained resources and demanded exceptional agility to manage rapid changes.”
Monkmeyer expects that uncertainty will remain a defining influence in 2026, with the potential renegotiation of the United States-Mexico-Canada Agreement as well as efforts to enforce stricter compliance for English proficiency and non-domiciled commercial driver licenses by the Federal Motor Carrier Safety Administration.
‘The New Normal’
“If 2025 taught us anything, it’s that uncertainty is the new normal,” Monkmeyer said. “As we move into 2026, visibility and flexibility will be critical. Businesses that invest in technology to automate processes and enable faster, data-driven decisions will gain a competitive edge. Third-party logistics providers like DHL Supply Chain are well-positioned to support this.”
The industry downturn started about midway through 2022. The pandemic had brought a surge in freight demand that drove equipment sales, but this led to a mismatch between demand and capacity when the post-lockdown economy shifted back to services.
“The uncertainty has clearly impacted the broader economy, and it’s impacted, specifically, the trucking market,” said Eric Starks, chairman of FTR Transportation Intelligence. “And so, not only has it delayed the recovery, as we start thinking about a forecast, but it materially impacted the middle of this year. And as we moved into the second part of 2025, things have been much slower than we had initially anticipated before any change within the administration.”
Trade Policy Impact
Starks echoed the point that trade policy has been a major driver of uncertainty this year. Trump has made tariffs a cornerstone of his trade agenda, leading to a slew of threats and tentative deal announcements. For Starks, the issue has been less about the purpose or size of the policy, and more about how much these proposals seem to be constantly changing.
Trump arrives to the White House on Dec. 13. (Jose Luis Magana/Associated Press)
“That has created uncertainty on how businesses should be reacting and how they should be spending,” Starks said. “Everybody is trying to figure out how do I allocate my resources, and when you have the amount of uncertainty that we have seen given the announcements, or lack of announcements, for clarity, then people just wait, and that’s exactly what has been happening.”
EPA Phase 3 Factor
Starks also pointed to a potential shift in upcoming truck emissions regulations as an example. EPA has been reconsidering its Phase 3 rules that aim to place stricter emissions standards on heavy-duty vehicles in model years 2027 to 2032. The push for stricter commercial driver licenses standards also gave decision-makers a reason to pause.
“Uncertainty, I think, was more of a factor for the shipper,” said Jason Seidl, managing director at the investment banking company TD Cowen. “They had to deal with multiple changing tariff winds, and that was difficult. I think, for the trucker, you really looked at another year that disappointed. You finally got some rate increases, but not enough to cover your costs.”
Seidl pointed to nearshoring and reshoring as major areas where shippers need clarity to make longer-term investments. He also suggested reducing red tape as another step the government could take.
“The biggest thing, I think, it’s impacting is any longer-term, larger investments,” Seidl said. “A good friend of mine once said uncertainty is the killer of investment, and it’s been an uncertain year for any large project. I think all of those tend to get put on hold, and at the end of the day, all somebody wants is the rules of the game. So tell us what the rules are.”
Volume Down 10% in Q3
The U.S. Bank Freight Payment Index showed that freight volume fell nearly 3% sequentially in the third quarter and were down 10% year over year. This occurred while spending continued to climb due to tightening capacity and other pressures.
“It really was a combination of economic and regulatory changes converging at once,” said Jeff Pape, general manager of transportation at U.S. Bank Corporate Payment Systems. “Tariffs and trade policy have been a constant source of volatility, keeping everyone on their toes. Uncertainty about the economic picture also added challenges. There have been soft spots in consumer demand, which has weighed on freight volumes.”
“Uncertainty, I think, was more of a factor for the shipper,” Seidl said. (Daniel Ingelhart/Getty Images)
Pape notes that regulatory changes have added another layer of complexity but that businesses are beginning to adjust, which allows them to start planning.
“Shipment volumes dropped, spend rose and both shippers and carriers were navigating a constantly shifting landscape,” Pape said. “But what’s notable now is that some of the volatility, especially around tariffs, has started to subside. Earlier in the year, tariff discussions created a lot of hesitation and stop-start activity. Recently, though, we’re seeing shippers and carriers adapt.”
Southwest Hit Hardest
U.S. Bank data also showed that during the third quarter uncertainty was most pronounced for carriers in the Southwest. The region recorded a 15.7% decrease in freight levels from the previous quarter and a 32.8% drop compared with the 2024 period. This was driven by factors such as the pace of home construction and a cooling labor market.
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“I think just because the end result wasn’t a wild and crazy year doesn’t mean there wasn’t uncertainty,” said Ken Adamo, chief of analytics at DAT Freight & Analytics. “Uncertainty to me means big questions about outcomes, and just because the outcomes stayed relatively the same throughout the year, it doesn’t mean folks weren’t anticipating major changes in one direction or the other.”
Adamo also pointed to the impact frontloading has had on seasonality. This occurred when shippers moved holiday goods into warehouses early to get ahead of anticipated tariffs. He didn’t see much to boost the demand side, either.
Demand Must Return
“A supply-driven recovery is not one that’s going to blow your doors off,” Adamo said. “What we need is demand to come back. We look at the year in review, we were expecting three, maybe four, interest rate cuts this year, and we got a lackluster one at 25 basis points. I think a lot of what we expected that could, perhaps, benefit on the demand side didn’t happen this year.”
Tractor-trailers wait in line at the Otay Mesa Port of Entry on the U.S.-Mexico border in Tijuana, Mexico. (Carlos Moreno/Bloomberg)
Adamo warned that volatility in the market hindered investments. He also noted that it impacts consumers and sectors such as residential construction that have a ripple effect on transportation.
“I would say, without question, tariffs were the biggest driver of uncertainty throughout the course of the year,” said Eric Fullerton, vice president of product marketing at Project44. “What we saw, whether it be at a country or at an industry level, was changes, or potential changes, or threats of changes, that happened, essentially it has seemed like it was on a whim.”
Investments in AI
Fullerton added that these decisions represented potentially transformational shifts to the everyday operations of carriers, shippers and 3PLs. He also has seen decision-makers pause regarding investments in artificial intelligence.
“There’s more piloting and more testing, and I still see a lot of skepticism,” Fullerton said. “That’s been an area of uncertainty where people are still [questioning], is this technology you’re going to try to bring in, is this intended to replace my job, is it intended to augment my work.”
ACT Research has highlighted carriers’ concerns about investing in equipment. The commercial vehicle and freight forecasting company even warned in a recent report that new tractor demand remains subdued amid uneven growth in key freight-generating sectors, with uncertainty and headwinds weighing heavily on forecasts for 2026.
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“Part of the uncertainty story is tariffs,” ACT Research Vice President Steve Tam said. “That’s all about the cost of the vehicles going up, and the prolonged pressure on the carriers. They’re not seeing their top lines in their businesses make any improvement. They’re only seeing their bottom lines increase, and so their margins are getting squeezed.”
ACT Research had forecast toward the beginning of the year that the Class 8 market was going to sell about 250,000 units in the U.S. by early December. The current sales number is trending about 15% below that prediction at 215,000 units.
“The other major factor, I think, that’s driven uncertainty this year has been changes to regulations that relate to our industry,” Tam said. “Emissions regulation is a case in point. The industry was on pins and needles all year once the EPA was given the directive to go back and review their rulemaking for the 2027 NOx standards. And again, folks spent the better part of the year wondering, worrying, theorizing, about what was going to happen.”
