Structural Shifts in the U.S. Trucking Industry
- ISCRO MSU
- 2 hours ago
- 7 min read
Written by Christian Naida (Research Lead), Brendan Furnari, Ani Bhaskar, William Streets
EXECUTIVE SUMMARY:
Trucking rates reached a record high in 2022 but have since been declining.
There continues to be new regulation in the trucking sector mainly around English Language Proficiencies tests.
From the increases in freight costs this helps explain some of the inflation that we see in the broader economy.
Many future technologies are being fielded in the trucking sector such as advanced telematics and new better safety systems designed to reduce risk for drivers
Introduction
Trucking is an industry that impacts all goods. It is a crucial form of transportation to get products to the end customer. Trucking is an industry that has currently been seeing many changes due to its long-established trends. Four changing trends will be discussed: current pricing of hauling cargo on a truck, new changes in regulation in trucking focusing on the new English language proficiency (ELP) test, how the increase in trucking rates affect the larger economy, and finally looking at some of the future technology that will shape the trucking industry.
Changes in Trucking Rates
The trucking industry has recently been facing significant rate fluctuations as reflected in the PPI (producer price index), the average change over time in the selling prices received by domestic producers for their output (Figure 1).
As seen in the graph above, the trucking PPI surged following the COVID-19 pandemic reaching a peak of 210 in 2022 before gradually declining, with a noteworthy disruption in 2024. The index currently remains in the 170’s, substantially higher than pre-pandemic levels. A high PPI can indicate a strong economy with strong demand for trucking services, while at the same time it may indicate higher consumer prices (Richmond Fed). With this recent high demand, we would expect an increase in trucking employment (Freightwaves). Surprisingly, in recent years, the opposite has been noted. Employment peaked at the end of 2022 and has since then steadily declined (Figure 2). This decrease in employment can lead to higher consumer prices, as well as disrupted supply chains (Clevelandfed.org).
Another anticipated outcome with this high demand in the industry is an increase in the purchase of heavyweight trucks to meet this demand for trucks (Figure 3). However, sales of these vehicles have declined sharply in recent years. As seen in the graph below, these sales have reached a 5-year low, currently sitting at 400,000.
Heavyweight truck sales are widely regarded as a key indicator of economic health as companies often adjust their purchasing decisions in response to their confidence in future market conditions (FRED). This suggests that companies purchasing these trucks may be anticipating a future economic slowdown. An alternative explanation for this trend is the industry’s increasing interest in greater efficiency, a shift that has been drastically accelerated by recent technological innovations.
Changes in Regulation in the Trucking Industry
The regulatory environment has been quickly changing in the trucking industry recently centered around two distinct topics: ELP (English Language Proficiency Tests) and new rules on non-domiciled truck drivers. The ELP tests are nothing new and have been around since 1937 for drivers to be able to read the signs on the road and be able to navigate the motorways in a safe and effective way. Recently, more aggressive enforcement of these tests have been taking place and on May 20th 2025 there was also an increase in the penalty if a driver does not pass said test putting the driver immediately out of service meaning they can no longer haul any loads as a for hire truck driver again until they pass the English language proficiency test again and get the hold removed (FMCSA). On October 30, 2025, U.S. Transportation Secretary Sean Duffy announced that more than 7,000 commercial truck drivers had been placed out of service this year for failing to meet federal English Language Proficiency (ELP) standards showing the real effects of this increased in enforcement and the results of the new harsher penalties that are put in place (FreightWaves). Stricter ELP enforcement reduces the number of eligible drivers, directly tightening trucking capacity, especially in border regions, such as the U.S.- Mexico border, where non-domiciled drivers make up a significant share of cross-border hauls.
There have been recent changes to the rules focused on non-domiciled truck drivers which have since been revoked but do give some form of a roadmap where regulations might be changing in the future. On July 27th, 2025, a nationwide audit of non-domiciled CDL holders which, focused on drivers that may not be qualified for this form of a CDL (FMCSA). From the results of this audit new, restrictions were put in place on eligibility for non-domiciled CLP (Commercial Learners Permits) and CDLs to individuals living in foreign countries. These rule changes were spurred on by the amount of compliance issues they found in the prior audit announced on September 26th (FMCSA). Truck drivers must have had an employment-based visa to get a non-domiciled CDL under these past restrictions. While these rules have been since rescinded as of the publishing of this article this does show where trucking regulation might go next in tightening the process and imposing more requirements of potential applicants getting either a Commercial Learners Permit (CLP) or a Commercial Driver’s License (CDL)
This graph above shows the dramatic impact from the greater amount of enforcement going from 10,000 violations in 2023 and 2024 to over 36,000 violations in 2025 as of the writing of this article. This increase in violations will lead to a reduction in trucking capacity as a whole especially around the US – Mexico border. There were also new violations codes introduced because of the greater amount of enforcement of these types of ELP violations specifically violation 391.11B2Z which is titled “Border Zone - Driver cannot satisfy the English language proficiency requirements of 391.11(b)(2) as per FMCSA Enforcement Guidance Memo MC-SEE-2025-0001”. This new code was created to help better track violations inside of the border zones which have special rules that are governed by the USMCA.
Economy and Industry Impact
The trucking industry is experiencing significant financial and operational strain as carriers confront rising costs, declining margins, and shifting market conditions, these pressure not only impact the carriers themselves, but also ripple throughout the economy, influencing pricing, consumer behavior, and firm’s supply chain strategies. In the following section, we will look at the implications of the current state of the freight market on for-hire trucking capacity, inflation, and supply chain decisions.
On the carrier side, carriers face tighter margins. According to data from the American Transportation Research Institute (ATRI), the average operating margin has been decreasing each year the past 5 years, with a 5.3% lower average operating margin in 2024 than 2023 (FreightWaves). This forces some smaller carriers or owner-operators to exit the market. These carriers exiting the market consequently reduce capacity. According to the ACT For-Hire Trucking Index, freight volumes fell to 42.5 points, down from 43.4 points in April. For context, below 50 points signifies degradation of freight volumes (ACT Research). Overall, firms within the trucking industry are facing margin pressure, which leads to a decrease in capacity.
In addition to the impact on firms within the freight industry as described above, the impact of higher freight rates contributes to broader inflationary pressure, affects consumer behavior, and influences macroeconomic outcomes. According to PMC, increases in shipping costs translate into consumer-price inflation (PMC). This is caused by businesses facing tighter margins forcing them to raise prices. Additionally, supply chain strategies may shift where firms may re-evaluate sourcing strategies, hold more inventory, or shift to local suppliers to avoid high shipping costs. In many cases, higher logistics and transportation costs become structural overhead, influencing long-term investment, pricing, and supply chain resilience decisions (McKinsey).
Future Technology
The future of the trucking sector is being shaped by rapid advancements in technology, with driverless trucks standing out as a transformative force. According to OTR Solutions, autonomous vehicles are increasingly integrated with telematics and advanced safety systems, promising improvements in highway safety, drastic reductions in human error, and greater operational efficiency for fleets. This push towards automation addresses persistent labor shortages in the industry and supports more cost-effective, long-haul operations. The Truckstop article further highlights how these technologies coincide with broader modernization efforts in the sector, including the adoption of alternative fuels and digital freight platforms, collectively preparing carriers for a more competitive and sustainable future.
In addition to automation, innovations in route planning and digitalization are enhancing day-to-day logistics performance. AtoB details how artificial intelligence and IoT-based platforms are facilitating real-time route optimization, enabling carriers to reduce fuel consumption and provide faster, more reliable deliveries amid heightened market demands. However, as noted by NATSA, these technological gains are occurring alongside evolving regulatory requirements, such as stricter emissions standards and compliance checks specifically tailored to new vehicles and digital systems. Successful transportation companies are those that invest in both technology and regulatory adaptation, positioning themselves to navigate challenges and capture opportunities as the trucking sector moves toward a more data-driven and sustainable future.
Conclusion
Trucking is a large industry that affects every industry in some form. There continues to be many large changes that the trucking industry faces from increases in regulation, new technologies like electric trucks and autonomous systems, and a changing freight market that has higher prices than in the past and less new capacity on the road today. Due to these changes in the market conditions in the trucking sector this has in part created the higher prices and the price inflation that we see in the economy more broadly.