Trucking Industry Outlook for 2025: Looking ahead to the remainder of 2025, the North American trucking industry faces a multifaceted landscape influenced by economic moderation, regulatory impacts, and market realignments. Key factors expected to present a blend of opportunities and challenges are as follows:
Economic Overview – The U.S. economy enters the second quarter of 2025 in a state of heightened uncertainty. While consumer spending showed modest growth earlier in the year, momentum has weakened under the weight of tariff-related inflation and elevated borrowing costs.
Freight Demand Moderation – Freight volumes remain subdued, with signs of further slowing as tariff-related uncertainty dampens industrial activity. Load-to-truck ratios rose in early April, driven by tighter capacity, but spot market strength has yet to materially shift demand fundamentals. Private fleets continue to absorb more freight, pressuring for-hire carriers. Shippers are managing lean inventories, avoiding major restocking until pricing volatility and policy direction stabilize.
Capacity Rebalancing in Progress – While capacity remains elevated relative to demand, signs of rebalancing are emerging. Class 8 production has slowed sharply from late 2024 highs, and used equipment markets are showing normalization. However, overall availability remains sufficient, and order activity has softened. The March load-to-truck ratio rose significantly, pointing to near-term tightness that may reverse as pre-tariff demand fades and seasonal trends moderate.
Spot Rate Volatility – Spot rates rose early in the year but have since stabilized, tracking close to seasonal norms. The temporary lift from pre-tariff shipping is expected to taper in the second quarter, with rate direction hinging on whether capacity tightening can persist against a softer freight backdrop. Longer-term, higher vehicle costs and EPA compliance uncertainty could push spot rates higher, but for now, rate recovery remains sporadic.
Class 8 Trucks – Class 8 demand continues to cool after a strong finish to 2024. Preliminary first-quarter orders slowed significantly, as fleets step back amid softer freight volumes, rising equipment costs, and policy uncertainty. The surge in 2024 builds left inventories elevated, quieting early-year replacement activity. Vocational truck demand has held up better, supported by construction and infrastructure needs, but prebuying tied to the EPA Clean Truck rule has not materialized as expected due to economic and regulatory volatility.
Regulatory and Market Factors – Tariff-driven cost inflation is now a defining challenge for the industry. ACT Research estimates per-unit cost increases of roughly $360 for Class 8 trucks and over $570 for trailers due to steel and aluminum duties. These additional costs, alongside broader economic uncertainty, are impacting both new vehicle demand and long-term planning. In addition, a tighter labor environment and rising compliance costs will continue to influence fleet operations throughout the year.
Tariffs Blamed for Mack Truck Layoffs: As a result of economic uncertainty caused by U.S. tariffs, over the next three months, Mack Trucks plans to lay off between 250 and 350 workers at its Lehigh Valley Operations center outside Allentown. “Heavy-duty truck orders continue to be negatively affected by market uncertainty about freight rates and demand, possible regulatory changes, and the impact of tariffs,” spokesperson Kimberly Pupillo said. “Today we informed our employees that this unfortunately means we’ll have to lay off 250-350 people at LVO over the next 90 days,” Pupillo said. “We regret having to take this action, but we need to align production with reduced demand for our vehicles.”
State Rep. Josh Siegel (D-Lehigh) said the layoffs are “a clear signal of the dangerous economic instability being fueled by the Trump administration’s chaotic tariff policies.” “The tariffs, erratic, broad, and poorly targeted, are crushing core U.S. industries like trucking and manufacturing. Supply chains are snarled, costs are soaring, and confidence among employers is collapsing,” Siegel said in a news release.
President Trump said on the campaign trail last year that tariffs would return manufacturing to the U.S. and generate hundreds of millions of dollars for the U.S. Treasury. At the beginning of April, Trump announced tariffs on products imported from other countries, beginning with a universal 10% duty and increasing with additional reciprocal tariffs as high as 50% against countries with large trade deficits or other barriers to exports. The announcement sparked a massive stock market sell-off that erased trillions of dollars in value, which was followed by the largest single-day increase when Trump announced a 90-day reprieve for most countries. He doubled down on tariffs for Chinese imports, raising the duties to 145%.
Class 8 Truck Orders Decline 5.9% in March: According to ACT Research, North American Class 8 truck orders in March continued to trend below year-ago levels as they faced additional pressures from tariffs and an uncertain economy. Class 8 net orders, which totaled 16,500 units in March, were down 5.9% from the same month last year.
“The first quarter of 2025 has been defined by one word: uncertainty,” said Carter Vieth, research analyst for ACT Research. The fact that cancellations are at a 20-month high may indicate customers are pulling back on orders, given the increasingly pessimistic outlook. “Whether the slowdown in orders is a result of moderating economic activity, private fleets’ pausing expansion, or a response to trade and policy, uncertainty is difficult to surmise and remains an open question. Trump’s takeover of the CHIPS Act funding, freezing funds related to the IRA and IIJA acts, and the review of EPA ’27 have taken the tailwinds out of our forecast coming into 2025.”
New and pending U.S. tariffs and retaliatory tariffs are expected to significantly increase costs for North American Class 8 trucks, tractors, and related components. While OEMs and suppliers may consider shifting production to mitigate tariff exposure, such strategic adjustments are costly, complex, and time-consuming, further complicating industry planning.
Trucking Industry: Driver Shortage or Retention Crisis: Truckload carriers continue to struggle to hire and retain qualified truck drivers. According to American Trucking Associations (ATA) surveys, the driver shortage has ranked as a top industry concern for over a decade. The Bureau of Labor Statistics notes that this problem has persisted since the 1980s. Despite low freight rates, carriers are paying more for drivers to combat hiring difficulties. The Department of Labor reports that long-haul truck driver wages have increased faster than inflation for most of the last decade. Since 2020, wages have grown an average of 6% per year, reflecting carriers’ struggles to attract and retain talent.
While the hiring issue has long been attributed to what is described as the “driver shortage”, not all industry experts agree that such a shortage exists. Some argue that the issue is pay and working conditions, rather than a true lack of drivers. A study by the IZA Institute of Labor Economics found no evidence of a sustained driver shortage, concluding that high turnover creates the illusion of a labor crisis. The ATA estimates that large truckload carriers experience turnover rates averaging 83% to 93%, creating instability in the labor force. Primary factors contributing to the high turnover are as follows:
- Drivers often leave for better pay or sign-on bonuses.
- Long hours and time away from home make the job demanding.
- Drivers can switch jobs easily, leading to frequent job-hopping.
Industry reports suggest that U.S. freight demand will rise in the coming years, which could worsen the perceived driver shortage, and retirements are a major concern. In 2019, the ATA estimated that the average truck driver was 46 years old, with retirements projected to be the biggest contributor to the driver shortage through 2030. As the freight market prepares for an upturn, the demand for qualified drivers is expected to rise, making hiring and retention even more pressing. It is estimated that the shortage of drivers could exceed 160,000 by 2030.
EPA to Reconsider Emissions Standards for Heavy-Duty Trucks: On March 12, Lee Zeldin, U.S. Environmental Protection Agency (EPA) Administrator, announced that the EPA is reconsidering the Biden-Harris administration’s greenhouse gas emissions standards set to go into effect for model-year 2027 and later heavy-duty trucks. The agency is also reconsidering regulations for passenger vehicles and light- and medium-duty vehicles. In addition to imposing more than $700 billion in regulatory and compliance costs and making it difficult for Americans to buy safe, affordable cars, Zeldin said the standards would increase the overall cost of living. The EPA is also reevaluating other parts of the Biden-Harris “Clean Trucks Plan,” including the 2022 Heavy-Duty Nitrous Oxide rule, which “results in significant costs that will make the products our trucks deliver, like food and other household goods, more expensive.”
These are among 31 actions the agency is launching in an effort that Lee Zeldin described as “the greatest and most consequential day of deregulation in U.S. history” as well as “the most momentous day in the history of the EPA.” Zeldin also said, “The American auto industry has been hamstrung by the crushing regulatory regime of the last administration. As we reconsider nearly 1 trillion dollars of regulatory costs, we will abide by the rule of law to protect consumer choice and the environment.” The EPA said its reconsideration of the emissions regulations is consistent with President Trump’s executive orders and the agency’s new “Powering the Great American Comeback” initiative, which was announced February 4. “While accomplishing EPA’s core mission of protecting the environment, the agency is committed to fulfilling President Donald Trump’s promise to unleash American energy, lower cost of living for Americans, revitalize the American auto industry, restore the rule of law, and give power back to states to make their own decisions,” Zeldin said.
American Trucking Association President Chris Spear, in a statement, thanked Trump and Zeldin “for restoring common sense to our nation’s environmental laws and demonstrating bold leadership on this critical issue that affects not only the 8.5 million men and women who work in trucking, but all Americans.”
Trends in Used Equipment Inventory and Values
The used truck market showed no signs of letting up in March. Based on information published by ACT Research, preliminary Class 8 same-dealer used truck retail sales volumes jumped 17% on a month-over-month basis. According to Steve Tam, Vice President at ACT Research, “The market easily outperformed historical seasonality, which called for an increase of 12% month-over-month. Auction sales were true to form, adding 44% month-over-month in typical third month of the quarter fashion. Wholesale transactions rounded out the trifecta, expanding 23% month-over-month. In total, March preliminary sales gained 28% month-over-month. Given the current level of economic and political uncertainty, volumes suggest truckers are taking advantage of available equipment at attractive prices,” Tam concluded.
According to the latest market reports from Sandhills Global, both inventory and values are trending down for used heavy-duty trucks. Used truck inventory was particularly low compared to year-ago levels and has been on a downward trend for seven months. Although inventory levels in March posted a modest month-over-month increase of 0.24%, they were down 23.02% from the same month last year. Used day cab inventory levels rose 2.18% month-over-month, more than other categories, while used sleeper trucks led in year-over-year inventory decreases with a 40.56% decline.
Asking prices have also been trending downward for seven months, rising just 0.06% month-over-month in March, but posting a decrease of 6.31% year-over-year. Day cab trucks experienced the largest drop in year-over-year asking value with a decrease of 7.35%. Auction values continued a downward trend as well, decreasing 0.52% month-over-month and 6.6% year-over-year in March. Used sleeper truck auction values were down 1.27% month-over-month, more than other categories. Used day cab truck auction values decreased more than other categories year-over-year, down 8.86%.
The full impact of tariffs on used Class 8 truck prices is yet to be determined. Higher tariffs may lead to reduced availability of new trucks, driving up the demand for used ones and resulting in higher prices in the secondary market. Any increase in demand may also slow down depreciation rates for used trucks. In the current state of heightened economic uncertainty, monitoring industry trends and tariff changes will be crucial for potential buyers.