Shippers Still Hold the Cards: Carrier Survival Tactics

Right now, shippers are calling the shots in the truckload market, but the balance won’t stay this way forever. The real question is what it will take to flip the cycle, and how can carriers hang on until it does.

In 2019, carriers were warned that shippers were clawing back rates and shifting freight from direct carrier relationships to freight brokers. The cycle has now come full circle. The COVID boom has faded, leaving carriers once again stuck in a market tilted heavily toward shippers. Now, in year four of what many call the Great Freight Recession, the long-awaited recovery has yet to arrive.

Carriers are burning through cash, and anticipated market inflection keeps slipping further out of reach.

The COVID Windfall and the Easy Money Mirage

The pandemic era delivered real money to truckload carriers. Contract pricing ratcheted up across 2021, and many fleets posted record revenue and profits, paying down debt and expanding long‑haul capacity. Carriers made record profits, long‑haul capacity effectively doubled over 2021, a reflection of how tight the market became. Motor carriers’ contract pricing and profitability were lifted by demand. Those gains were real but fleeting.

The COVID profit spike created the illusion of “easy money.” Tens of thousands of mostly single truck startups piled into the market to chase elevated rates, setting up a longer, more painful reset once demand normalized.

The Scorecard: Demand Is Choppy, Costs Are Sticky, and Pricing Power Is Thin

This is the market reality today. Too many trucks chasing too little freight. Carrier costs are up 30%+ since COVID. Cabotage is real. Driver, Inc. does not play fair and does not follow trucking regulations as there is little enforcement; and, to add insult to injury, tariffs are squashing demand.

Top‑line industry measures show little sustained improvement. The American Trucking Associations’ latest American Trucking Trends tallies 2024 freight at 11.27 billion tons, down from 11.41 billion a year earlier, with industry revenue sliding to $906 billion from $1.004 trillion.

Spot and contract benchmarks point the same way. DAT reported July’s national average spot van rate at $2.05 a mile including fuel surcharge. August softened after a July pull‑forward tied to tariff timing, a reminder that policy uncertainty is moving freight around the calendar rather than expanding it.

Against those rates, many carriers are still under water. KSMTA’s FreightMarks^TM shows dry van carriers averaging a total cost per mile of $2.398. Even modest positive months can be erased quickly by fuel, insurance, and aging equipment.

Why Supply Cuts Alone Haven’t Delivered Relief

Many truckers argue the path to an upcycle is to purge excess capacity. To be sure, exits have occurred and new entrants slowed, but utilization remains tepid and the supply side has not tightened enough to force price. FTR notes capacity utilization has been “the most stable factor, but only marginally beneficial to trucking companies.” Class 8 orders likewise reflect fleet caution.

Two structural frictions are prolonging the imbalance:

First, opaque and unlawful market activity distorts “true” capacity. Double brokering, “ghost” or reincarnated (so‑called “Trucking Inc.”) carriers, and identity fraud muddy who is actually hauling freight and at what cost. FMCSA has detailed options to address unlawful brokerage, and trade press is tracking legislation that would strengthen enforcement teeth. But the cleanup is ongoing, not done.

Second, safety‑rule enforcement inconsistencies erode the floor. Federal rules require drivers to read and speak English well enough to converse with the public and understand road signs. FMCSA reiterated in May how carriers should assess English language proficiency during driver qualification. The industry has urged stepped‑up enforcement, arguing gaps imperil safety and fairness. Consistency matters: when rules are unevenly enforced, compliant carriers bear higher training and operating costs while competing with those who don’t.

The Demand Side Will Decide the Turn

The COVID boom was a demand story; the next turn will be, too. Tariffs are tugging demand across months as importers pull forward or pause. Broader policy uncertainty – most notably tariffs – tends to suppress discretionary goods spending and reorder patterns. As Dr. Jason Miller, Michigan State professor in the Department of Supply Chain Management, has emphasized in multiple venues, the truckload cycle improves sustainably only when goods demand improves. That logic is playing out in 2025’s uneven data.

What Carriers Must Do Now: Freight Network Engineering and Broker Management

Carriers cannot afford to bank capacity for the recovery; they must control their destiny now.  With rates still soft, survival depends on engineering your freight network for density and controlling how brokered freight enters it. KSMTA’s latest FreightMath^TM playbook spells out immediate, no‑excuses moves.

1. Freight network engineering: build density, kill drift.

• • Draw the box and enforce it. Define your freight network and the resulting geographic footprint, then stop accepting freight that pushes trucks outside it. “Tourist” lanes (routes outside a carrier’s core network) drain cash because it takes multiple moves to get assets back to where they earn. Treat off‑map loads as exceptions and require a sign‑off.
  • Stack freight you control. Prioritize direct shipper freight that starts in your home markets and ends inside your network. Even if early pricing is mediocre, incumbency on repeat lanes pays back as demand firms. Keep selling while you’re cutting elsewhere.
  • Right‑size to your defined Align tractors, trailers, and driver domiciles to your network plan. Park capacity that can’t be kept inside the box at a positive contribution. (If drivers live outside the footprint, you’re paying to reposition them every week.)
  • Price total cost, not linehaul alone. Quote the all‑in number you need (linehaul + fuel recovery + accessorials) and back into the shipper’s surcharge method. If a customer uses a daily, lane‑specific fuel model (e.g., Breakthrough Fuel Recovery), negotiate MPG standards, timing, audit rights and data access up front – then recover the uncovered costs in linehaul.
  • Benchmark relentlessly. Compare OR, cost per mile, utilization and maintenance against peers so you know where your network bleeds.

2. Broker management: centralize control, raise the bar.

Brokered freight should fill gaps in your network, not dictate where you run.

• • Put one leader in charge. Assign a director of broker improvement with authority to accept/reject all broker loads, train front‑line staff and enforce rules of engagement. Centralized ownership stops margin leakage from dozens of ad‑hoc decisions.
  • Adopt a “network fit first” rule. Only take broker freight that starts/ends in your defined footprint or that shortens your path back to your base. Treat anything else as a premium exception.
  • Make market data non‑negotiable. Require reps to check a lane’s current range before bidding and record the results.
  • Track every broker offer in a simple load ledger: date, broker, miles, offered rate, negotiated rate, deadhead, margin, and outcome. Reviewing the log weekly exposes patterns, highlights training needs, and shows where brokers are taking advantage of weak spots in your process.
  • Score and tier your brokers. Keep a live scorecard (A/B/C/D) highlighting ontime pay, claims, detention responsiveness, network fit, and fraud red flags. Promote A tier partners with mini commitments; limit D tier to last resort backfills

The throughline is control. Engineer where you run and professionalize how brokered freight touches the network. Carriers that do both now will outlast the downturn and enter the next upcycle with healthier lanes, better partners and a cost base they actually control.

There are commercially available tools that provide market rates. KSMTA’s SpotCheck proprietary digital tool provides all of the above (minus assigning a director of broker improvement).

Bottom Line

This downturn won’t end just because capacity shrinks. The real turn comes only when the demand for goods strengthens and households and businesses buy more products that must move by truck. Until then, survival means engineering networks for density, protecting margin, and refusing to haul freight at a loss. Carriers that stick to discipline will be ready when demand rebounds – and better positioned to win the next cycle.

To learn more or discuss any of the ideas shared above, please contact a KSMTA advisor via the form below.