Why the 2026 Freight Cycle May Not Behave Like Those Before

Having close to a four-decade perspective on the freight market and its various cycles, I see the current freight market shift in 2026 as structurally different than other freight cycles I/we've experienced.

What I believe is happening as we talk to shippers today is they are reading the current truckload tightening through a familiar lens. Capacity will exit, rates will rise, new entrants will respond to the rate signal, capacity will refill, and the cycle will reset. That playbook has been reliable for nearly 40 years.

But I believe it produces the wrong answer this time around, and missing the right one could be costly for logistics and supply chain professionals.

The 2026 freight market has four structural features that none of the prior cycles had, and those four features, working together, are creating a less elastic truckload supply curve than the industry has had at any point in my career. That distinction matters because the speed and depth of any future softening cycle depends entirely on how quickly capacity refills when rates rise.

If the supply response is slower and shallower than history suggests, the transportation budgets shippers are building today may be materially under-modeling their multi-year exposure.

This article walks through the four structural factors driving that view, anchors them against four prior cycles I've worked through (1994-1996, 2004-2006, 2014-2016, and 2018-2019), and closes with two actions worth taking in the next 90 days.

The Four Structural Factors Changing the Supply Side

Factor 1: Regulatory Pressure Is Cumulative, Not a Single Event

The 2013-2014 Hours-of-Service revisions and the 2017-2018 ELD mandate were single-event regulatory adjustments. Carriers absorbed the change, adapted dispatch and operations, and within 12 to 18 months, the market returned to demand-driven dynamics.

The 2025-2026 regulatory environment is a different animal.

English Language Proficiency enforcement became a far more active priority during 2025 and was incorporated into the updated North American Standard Out-of-Service Criteria used by Commercial Vehicle Safety Alliance (CVSA) enforcement. FMCSA data shows a sharp rise in both ELP violations and out-of-service actions throughout 2025 and into 2026.

At the same time, the Non-Domiciled CDL Final Rule took effect in March 2026, while broader FMCSA activity around driver qualification, carrier fitness, and insurance verification also intensified. ACT Research's Driver Availability Index fell into a range historically associated with tightening freight conditions.

This marks a sustained tightening of who can legally and operationally participate in the truckload market. Carriers cannot simply adapt once and move on. The enforcement intensity continues, the compliance burden continues, and the affected portion of the driver pool potentially expands as enforcement reaches deeper into the carrier base.

In 2018, carriers installed ELDs, adjusted operations, and largely completed the transition. In 2026, there may be no equivalent completion point.

Factor 2: Demand Conditions Don't Pull Capacity Back This Time

The 2018 ELD tightening occurred during a strong freight environment: Industrial production was elevated, consumer demand was healthy, and freight volumes were expanding. The economic backdrop pulled new capacity into the market even as carriers struggled with compliance.

Owner-operators added equipment because the economics supported expansion. The strong demand acted as a counterweight to regulatory friction, and the supply curve responded in its historically typical way.

2026 looks materially different.

Capacity is tightening while demand remains soft. The Cass Freight Index points toward a supply-driven pricing recovery even as freight demand remains uneven. The Truck Tonnage Index is improving after a prolonged downturn, but industrial production is uneven, manufacturing activity is inconsistent, consumer demand has moderated, and inventories are being managed defensively.

That distinction matters. Rates are firming because supply is contracting faster than demand is recovering. There is less demand-side pull drawing new capacity back into the market. The mechanism that historically attracted new drivers, owner-operators, and carrier expansion operates within a far weaker economic backdrop today.

The math that encouraged rapid capacity growth during 2018 does not work as cleanly in 2026. Without that demand pull, the supply response many analysts expect may not return on the historical timeline.

Factor 3: Insurance, Financing, and Litigation Costs Raise the Threshold for New Capacity

Historically, the marginal carrier - the new owner-operator or the small fleet adding a truck - has been the mechanism that refilled tight freight markets. That supply response kept the truckload market highly elastic. The economics supporting that mechanism have changed materially. This may be the most important structural difference.

According to recent ATRI operational cost research, commercial trucking liability insurance costs have risen sharply over the last decade, materially outpacing general inflation. Premium increases accelerated further during 2023, 2024, and 2025 as insurers continued repricing risk. Larger legal settlements, rising litigation exposure, and the continued growth of nuclear verdicts have increased underwriting risk across the industry.

At the same time, organized cargo theft, fraudulent carrier activity, and staged load scams have become persistent operational and insurance concerns that now directly affect underwriting standards, deductibles, cargo exclusions, and carrier eligibility.

That burden falls disproportionately on smaller carriers. Small fleets and new authorities face substantially higher insurance costs than established fleets because underwriters have limited operating history and less ability to spread risk. Portions of the commercial trucking insurance market have also become more selective, making coverage both more expensive and harder to secure.

Equipment financing costs remain materially higher than during the 2018 cycle, while operating costs across labor, maintenance, insurance, and equipment continue pressuring margins. The threshold rate required to justify adding incremental truckload capacity is meaningfully higher than it was a decade ago.

Higher freight rates can still attract new entrants. But the rate threshold (and likely persistence of that level) required to make that expansion economically viable is materially higher than during prior cycles.

Factor 4: The Driver Pool Being Reduced Is Not a Pool That Returns at Higher Rates

The drivers being removed from active service through English Language Proficiency enforcement and increased scrutiny surrounding non-domiciled CDL qualification are not necessarily part of the traditional pool of capacity that historically returned when freight rates improved. Higher rates do not resolve qualification deficiencies, pass roadside inspections, or satisfy compliance requirements. A portion of the capacity currently exiting is leaving for regulatory and qualification reasons rather than purely economic ones.

In prior cycles, much of the sidelined capacity remained economically responsive. Drivers left temporarily for adjacent industries. Owner-operators parked equipment until rates improved. Smaller carriers paused operations waiting for better conditions. When pricing strengthened, that capacity often returned because the barrier to re-entry was primarily economic.

The 2025-2026 cycle appears different. A meaningful portion of the current attrition may be structurally unavailable rather than simply economically sidelined. The precise scale is debated and the data is still developing, but the directional implication is important: some of the capacity exiting may not sit inside the traditional pool that historically re-entered when rates improved. In other words, they may not come back.

That changes the elasticity equation. The truckload market could now face both a higher economic threshold for adding new capacity and a smaller pool of drivers and carriers capable of responding when rates rise.

Why This Freight Market Shift Is Slower to Show Up in the Data Than Past Freight Cycles

One observation worth addressing directly: the anticipated capacity shock tied to driver qualification enforcement did not initially materialize in the sudden, fast-moving way many expected following the 2018 ELD mandate. For much of 2025, those forecasts appeared overstated.

That outcome is itself part of the structural argument.

Prior supply shocks, particularly ELD implementation, were sharp and concentrated around defined implementation timelines. The 2025-2026 tightening is developing differently. The regulatory pressure is cumulative rather than event-driven.

Enforcement intensity has increased progressively (and sporadically) rather than beginning at peak levels. The financial and economic pressures compounding carrier attrition - including insurance costs, financing costs, and weaker demand - develop gradually rather than all at once.

By early 2026, the cumulative impact began appearing more clearly. Tender rejections moved materially higher from 2025 lows. Spot rates strengthened year over year. ACT Research's Driver Availability Index fell into a range historically associated with tightening conditions. The Cass Freight Index increasingly pointed toward a supply-driven pricing recovery even while demand remained relatively soft.

The tightening many expected to appear suddenly during 2025 instead emerged gradually through late 2025 and early 2026. Structural shifts in freight markets typically resolve more slowly than short-term operational disruptions.

Four Prior Cycles: The Pattern That Made the Industry Confident, and Why It May Not Repeat

To understand why this cycle may be different, it helps to understand what the historical pattern actually looked like.

1994-1996: The Deregulation Aftermath

Shaped by the long tail of the Motor Carrier Act of 1980 and follow-on legislation that further deregulated intrastate trucking, this period between 1994 and 1996 was supply-driven in the opposite direction of 2026. Capacity was expanding, not contracting. Deregulation accelerated the growth of small carriers and independent owner-operators while many of the largest carriers from the regulated era failed or consolidated under pricing pressure.

By the late 1990s, the deregulation-driven pricing reset had largely worked through the market, leaving a much larger, more fragmented carrier base operating under structurally lower rates. The relevance today is what that cycle ultimately created: the fragmented, low-barrier-to-entry trucking market where small carriers and owner-operators became the marginal capacity that historically refilled tight freight markets.

2004-2006: The Pre-Recession Tight Market

The period between 2004 and 2006 was a classic demand-driven tightening cycle. Industrial production was strong; consumer demand was recovering beyond post-2001 levels; and freight volumes were expanding. Truckload capacity tightened; rates climbed through 2004 and 2005; and the supply response followed the traditional pattern. Carriers added tractors, expanded fleets, and hired drivers. Elevated rates attracted new entrants, particularly small carriers and owner-operators.

By late 2005 and into 2006, capacity additions had largely caught up with demand, and pricing softened before the broader 2007 slowdown. Diesel prices rose from roughly $1.50/gallon in early 2004 to over $3.00/gallon by mid-2006, and many of the fuel surcharge structures now standard in freight contracts were developed during this period. Intermodal also gained share that largely held even after truckload pricing softened.

This remains one of the clearest examples of a traditional demand-driven freight cycle resolving through capacity expansion on the 12-to-18-month timeline.

2014-2016: Capacity Crunch and Freight Recession

The most internally complex of the four cycles occurred between 2014 and 2016. The Hours-of-Service revisions implemented in July 2013 restricted the 34-hour restart and added utilization limits. The American Transportation Research Institute (ATRI) estimated the changes reduced effective driver productivity by roughly 3% to 6%.

That supply pressure combined with severe winter weather and a strengthening freight market to produce the 2014 capacity crunch. Spot rates surged. Much of the industry believed the HOS-driven tightening represented a lasting reset.

That consensus proved overstated.

Carriers adjusted networks, hired additional drivers, and adapted to the new regulatory environment. By 2015, much of the operational disruption had been absorbed. From there, weakening freight demand took over as the dominant force. Industrial production softened, inventory destocking reduced volumes, and the American Trucking Associations (ATA) Truck Tonnage Index entered an extended weak period through much of 2015 and 2016.

Intermodal volumes held up relatively well, reinforcing a pattern that would matter later: share gained during tight truckload markets often held better than expected even after truckload pricing softened. The HOS productivity shock that many viewed as structural in 2014 proved largely absorbable within the industry's traditional adjustment cycle.

2018-2019: The ELD Spot Boom and Softening

One of the clearest modern examples of a regulatory supply shock initially forecast as a structural reset but ultimately more temporary than expected occurred between 2018 and 2019.

The Electronic Logging Device Mandate took effect December 18, 2017, with full enforcement beginning April 1, 2018. Leading into the mandate, much of the industry believed ELD enforcement would permanently remove meaningful capacity. Spot market load-to-truck ratios surged during early 2018, reaching record levels at the time, while truckload spot rates climbed sharply. The mandate was widely viewed as the regulatory event that would fundamentally reset the truckload supply curve.

The timing also coincided with a strong freight environment. The combination of strong demand and regulatory supply friction produced one of the tightest truckload markets of the last several decades.

But the industry adapted. Carriers reorganized routes, optimized dispatch, improved network planning, and adjusted to electronic compliance. By late 2018, spot rates had already begun softening, and much of 2019 evolved into a weaker freight market. The permanent structural reset many feared never fully materialized.

2020-2022 The COVID Pandemic

The 2020-2022 COVID Pandemic cycle is intentionally set aside for a basis of comparison - as it is an event beyond modern compare for countless reasons that hopefully does not occur again.

It was unlike any freight cycle in my 37 years in the industry, shaped by direct government stimulus to consumers, prolonged supply chain shutdowns, unprecedented port congestion, and demand patterns that no traditional cycle framework can explain. Drawing structural lessons from it for a normal supply-and-demand cycle would mislead more than inform.

What the Freight Market Shift Tells Us

Two observations come out of reading the four cycles together that do inform this freight market shift without acting as a direct corrollary.

The historical truckload supply curve has been highly elastic. When rates rise meaningfully, capacity has consistently responded with new carrier entrants and more trucks added to existing fleets. The mechanism through which truckload supply reacts to pricing signals has remained remarkably consistent across multiple decades and across very different cycle drivers, whether demand-led, deregulation-led, or regulatory-friction-led.

The industry has repeatedly overestimated the long-term structural impact of regulatory supply shocks. Both the 2013-2014 HOS changes and the 2017-2018 ELD mandate were widely viewed as permanent resets. In both cases, the disruption was real and meaningful in the short term, but the industry adapted within roughly 12 to 18 months. The forecasts proved directionally correct but durationally overstated.

That history is precisely why the current environment is being read through a familiar lens. But the four structural factors outlined above are not present in any of the prior cycles, and they may materially alter how the supply side responds this time.

What This Means for Future Demand Cycles

The most important implication of a less elastic truckload supply curve sits in front of the industry, not behind it.

At some point, whether later in 2026 or sometime during 2027, broader freight demand will eventually recover. When that recovery arrives, it may encounter a truckload supply side that responds differently than it has during prior recoveries.

Three implications follow.

First, the truckload market may not soften back toward current contract rate levels as quickly or as completely as it did during prior cycles. The mechanism that historically softened freight markets - rapid capacity expansion responding to higher rates - appears materially weaker today. Even if higher rates eventually attract new capacity, the threshold rate required to trigger that response is higher and the pace of the response may be slower.

Second, future freight recoveries may produce tighter truckload conditions at lower levels of demand growth than prior cycles required. If the supply curve is less elastic, the same amount of demand growth creates more upward pressure on capacity and pricing. Shippers building long-term transportation budgets around historical freight-cycle relationships may be underestimating future cost exposure.

Third, the cost advantage intermodal currently holds on qualifying long-haul freight may prove more durable than in prior cycles. Historically, intermodal gained share during tight truckload environments but often gave part of that share back once truckload markets softened. In a less elastic truckload environment, that softening process may happen later and less aggressively, increasing the likelihood that intermodal share gains hold more permanently.

None of this is a prediction about the precise timing or magnitude of the next freight recovery. The point is narrower and more structural: when demand recovery eventually arrives, the supply-side adjustment mechanisms that resolved prior freight cycles within roughly 12 to 18 months may not respond with the same speed or elasticity they historically did.

Two Actions Shippers Should Take in the Next 90 Days

Action 1: Lock Intermodal Contract Capacity and Stress-Test the Budget

Intermodal spot rates currently remain near historically depressed levels, while many industry forecasts now anticipate intermodal contract pricing moving higher into late 2026 as the truckload-to-intermodal pricing spread begins narrowing.

The historical comparison worth remembering is the 2018-2019 cycle. Shippers that secured intermodal contracts before the 2018 tightening cycle accelerated generally locked in favorable pricing for the duration of their agreements, while shippers that waited until the market fully tightened often paid materially more for the same capacity.

If the truckload supply curve is becoming less elastic, the value of securing longer-term pricing becomes structurally more important than in prior cycles. The pricing spread versus truckload remains historically wide, and much of the potential contract rate adjustment still appears ahead of the market rather than behind it.

Pair that with a finance-side stress test. Build a planning scenario where the next truckload soft cycle does not arrive on the historical 12-to-18-month timeline, and where elevated spot-market premiums persist materially longer than during prior post-2010 cycles. If that scenario creates a meaningful transportation budget overrun, that is information worth identifying now rather than discovering during a quarterly review in 2027.

Action 2: Build Dual-Mode Optionality Into the Routing Guide

In every freight cycle I've worked through, the shippers that navigated inflection points most effectively were the ones that built operational optionality into their networks before they needed it.

A routing guide that clearly identifies which lanes move intermodal as primary, which lanes can shift to intermodal as backup, and which remain truckload-only is what turns transportation strategy into executable operational decisions during tightening markets.

Shippers that build that optionality before the next demand recovery will already have a functioning network strategy in place when capacity tightens further. Shippers that wait will be forced to make modal decisions under operational pressure, which is typically when rushed implementations and avoidable costs enter the network.

Building optionality during a normal freight market is operationally manageable. Building it during a tightening market becomes materially more difficult and more expensive.

Freight in 2026 and Beyond

After nearly four decades and four major freight cycles, the most useful perspective I can offer shippers heading into the next several years is a careful assessment of why this cycle may behave differently than the ones that came before it.

The freight industry has a well-earned skepticism toward “this time is different” arguments, and historically that skepticism has often been justified. Regulatory supply shocks have been forecast as permanent structural resets before, only to be largely absorbed within 12 to 18 months. The historical record supports that default assumption.

What makes the current environment different is that several structural conditions are working together at the same time:

The regulatory pressure is cumulative rather than tied to a single-event adjustment
The demand environment lacks the strong economic pull that historically brought capacity back quickly
Financial barriers to entry have moved materially higher
A meaningful portion of capacity exiting the market may be structurally unavailable rather than simply waiting for better rates

Taken together, those dynamics may produce a truckload supply curve that is materially less elastic than what the industry experienced during prior cycles.

The implications for shippers are practical rather than theoretical:

Truckload pricing that may prove less mean-reverting
Intermodal cost advantages that may hold longer
Transportation budgets that benefit from being modeled against a structurally tighter supply environment rather than purely against historical patterns

Shippers that recognize those structural shifts and build flexibility into their transportation networks before the next major demand recovery may be better positioned than shippers waiting for another traditionally soft freight cycle to arrive on its historical timeline.

If you’re rethinking how the current cycle affects your multi-year transportation strategy, InTek Logistics works with shippers to analyze lane-level intermodal opportunities, build modal optionality into routing guides, and lock contract capacity during the current pricing window.

Request a lane analysis to start the conversation.

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Frequently Asked Questions

When will freight rates start rising in 2026?

Truckload spot rates have already begun rising through the first half of 2026. Tender rejections have moved materially higher from 2025 lows, and national linehaul spot pricing has strengthened year over year. By historical freight-cycle standards, the early stages of tightening already appear underway. The more important strategic question for shippers is no longer simply when rates begin rising, but how long the tightening phase persists and how fully the market eventually softens afterward.

How long do freight cycles typically last?

Historically, the major freight cycles have lasted between 18 and 36 months from tightening through softening and into the next inflection point. That pattern was reasonably consistent across the 1994-1996, 2004-2006, 2014-2016, and 2018-2019 cycles. What makes the 2026 cycle more difficult to model historically is that several of the mechanisms that traditionally resolved tightening cycles within 12 to 18 months appear weaker today.

Is the 2026 freight cycle similar to 2018 or 2019?

The 2026 freight cycle is not cleanly similar to those years. The 2018 cycle combined a regulatory supply shock - the ELD mandate - with a strong demand environment. The current cycle combines cumulative regulatory tightening with a much softer and less consistent demand backdrop. The 2018 tightening was initially forecast as structural but ultimately normalized as strong demand pulled capacity back into the market. The current cycle lacks that same economic pull.

What is freight supply elasticity?

Freight supply elasticity refers to how quickly and fully truckload capacity responds when freight rates rise. A highly elastic supply curve means new carriers, owner-operators, and equipment additions enter the market rapidly in response to higher rates, refilling capacity and eventually softening pricing. A less elastic supply curve means capacity responds more slowly and less completely, leaving pricing elevated for longer. The central argument of this article is that the 2026 truckload supply curve appears materially less elastic than during prior freight cycles.

What is a non-domiciled CDL?

A non-domiciled commercial driver’s license is a CDL issued by a U.S. state to an individual who does not live in that state, often used by drivers without permanent U.S. residency status. The FMCSA’s Non-Domiciled CDL Final Rule, which took effect in March 2026, tightened the qualification and issuance standards for these licenses. Combined with intensified English Language Proficiency enforcement, the rule changes have removed a portion of the driver pool from active service.

What’s structurally different about this freight cycle?

Four structural conditions distinguish the 2025-2026 cycle from prior freight cycles. First, the regulatory pressure is cumulative rather than tied to a single-event adjustment. Second, demand conditions are not pulling capacity back into the market the way prior recoveries did. Third, financial barriers to entry, particularly insurance, financing, and litigation costs, are materially higher than during prior cycles. Fourth, part of the driver pool exiting the market through qualification and compliance enforcement may be structurally unavailable rather than simply waiting for higher rates.

How should a shipper time RFPs to a freight cycle?

Two principles consistently emerge from prior cycles. First, secure longer-term pricing earlier than feels comfortable when the market begins tightening. The cost of moving slightly early is usually manageable; the cost of moving late during a tightening cycle can be substantial. Second, build modal optionality into the routing guide during stable markets, not during tight ones. The current cycle may add a third consideration: if truckload supply is becoming less elastic, the historical assumption that the next soft cycle will materially reset pricing lower may not hold as reliably as it did in prior decades.

Will intermodal share gained in this cycle hold?

Historically, intermodal share gained during tight truckload periods has generally held better than many analysts initially expected, although some freight typically shifts back to truckload once capacity loosened. The structural dynamics of the current cycle suggest intermodal share gains may prove more durable this time because any eventual truckload softening phase could develop more slowly and less aggressively than in prior cycles. That is not a guarantee, but it does shift the long-term modal economics in a way shippers should consider when planning multi-year transportation strategies.