Why Are Freight Rates Falling Despite a Truck Driver Shortage?

For years, the trucking industry has sounded alarms about a truck driver shortage, often pointing to recruitment challenges and high turnover rates. Yet, despite this ongoing concern, freight rates are at multi-year lows. This raises a critical question: If there aren't enough drivers, why are trucking rates plummeting? 

This contradiction stems from a complex mix of market forces, economic shifts, and structural changes in trucking. The reality is that the "driver shortage" narrative does not fully explain rate fluctuations—other factors, such as overcapacity, declining freight volumes, and broker influence, play a more significant role. 

The Trucking Industry's Boom-and-Bust Cycle 

As a freight factoring company working closely with truckers since 2010, we've seen the industry cycle through extreme highs and lows. While trucking activity follows predictable seasonal trends, major economic and regulatory events can create severe disruptions in freight rates. 

Major Market Shifts That Shaped Trucking Rates 

The trucking industry has faced extreme rate fluctuations in recent years, driven by economic and regulatory shifts. 

In 2019, the ELD mandate reduced driving hours, briefly tightening capacity and pushing rates up. But the biggest disruption came in 2020-2022 when pandemic-driven consumer demand sent freight rates to record highs. Thousands of new carriers flooded the industry, expanding fleets to chase the boom. 

By 2023, demand dropped, but the extra truck capacity remained, leading to a steep decline in rates. Over 20,000 carriers and 6,000 freight brokers shut down, including prominent names like Yellow and Convoy. Despite the ongoing talk of a driver shortage, the real issue is that too many trucks compete for too few loads, forcing rates to be lower. 

Why Are Freight Rates Falling? 

The "driver shortage" narrative oversimplifies the issue. While retention remains a challenge, freight demand has declined faster than driver supply, creating a market imbalance. Retail slowdowns, weaker imports, and reduced truckload tenders show that shippers need fewer trucks than during the pandemic. 

At the same time, truck overcapacity—a result of aggressive fleet expansions during the boom—has driven intense competition for loads, hitting spot market rates the hardest. Freight brokers are also under pressure to keep costs low, leading many truckers to believe that brokers are maximizing their margins while carriers struggle. 

Beyond the current downturn, structural shifts like e-commerce growth, AI-driven logistics, and potential automation are reshaping freight dynamics. But for now, the biggest takeaway is clear: rates are falling not due to a driver shortage but because the industry is adjusting after years of volatility. 

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Key Factors Driving the Freight Rate Decline 

1. The Truck Driver Shortage Is Not as Severe as Claimed 

Many experts argue: 

• The shortage is relative to demand—when freight volumes drop, fewer drivers are needed. 
• The real problem is driver retention, which could be a result of drivers continuously searching for better opportunities rather than an absolute lack of drivers. 

2. Freight Demand Has Dropped More Than Driver Supply 

• Even if there is a driver shortage, if freight volume falls, rates will still decline. 
• Retail slowdowns: Major retailers like Walmart and Target have reduced freight orders. 
• Declining imports: U.S. ports report fewer inbound shipments. 
• FreightWaves SONAR data shows a drop in truckload tenders, confirming fewer loads per truck. 

3. Truck Overcapacity Is Driving Rates Down 

• Many new carriers expanded their fleets during the freight boom. 
• Now, demand has normalized, but those extra trucks remain, creating an oversupply. 
• Too many trucks competing for fewer loads = lower rates. 

4. Spot Market Rates Are More Volatile Than Contract Rates 

• Large carriers secure stable contracts, but owner-operators rely on the spot market. 
• When demand weakens, spot rates drop first, creating financial pressure on small trucking businesses. 

Read more: How Can Truckers Survive Slow or Challenging Markets?

5. Freight Brokers Are Driving Rates Down 

A common belief among truckers is that freight brokers keep rates artificially low. 

• Brokers negotiate the lowest possible rates, maximizing their margins. 
• Many truckers believe brokers are pocketing higher profits while carriers struggle. 

6. Economic Cycles & Structural Shifts in Trucking 

• Industry follows booms and busts—downturns always follow high rates. 
• E-commerce and AI-driven logistics are shifting load distribution and creating new freight patterns. 
• Autonomous trucking advancements could further impact driver demand in the long run. 

The Bigger Picture: More Than Just a Driver Shortage 

The reality behind falling freight rates is complex: 

• Freight demand has dropped faster than driver supply. 
• Truck overcapacity is the biggest issue—too many trucks, not enough loads. 
• Spot market volatility & broker influence are making rates worse for small carriers. 
• The trucking industry is in a normal cyclical downturn—this happens after every boom. 

Takeaway: If you're an independent trucker or small carrier, the current market is tough—but rates will eventually stabilize as weaker players exit and capacity tightens. 

Stay informed, adapt, and be prepared for the next market upswing. 

How Summar Financial Helps Truckers Navigate Uncertain Markets 

At Summar Financial, we understand that low freight rates, rising costs, and market uncertainty can put pressure on truckers and carriers. That's why we provide fast, flexible, and transparent factoring solutions to help you maintain steady cash flow—no matter what the market looks like. 

Why Truckers Choose Summar Financial: 

✔ Same-Day or 24-Hour Payments – No waiting weeks for broker payments. 

✔ No-Reserve Factoring Plans – Get all your money upfront. 

✔ True Non-Recourse Factoring – If a broker fails to pay, we absorb the risk. 

✔ Fuel Card Program – Exclusive fuel discounts to reduce operating costs. 

✔ No Long-Term Contracts – We earn your business through service, not contracts. 

In uncertain times, working with the right financial partner can make all the difference. 

Need more stability in your trucking business? Get in touch with Summar Financial today and see how our factoring solutions can keep you moving forward.