NEW ORLEANS – An overview of the transportation market at Trimble’s Insight conference for customers and partners felt like the monthly FreightWaves/SONAR State of Transportation webinar, as experts in the field tried to identify the reasons for continued transportation stagnation and when the market might turn around.
The panel, titled “Transportation 2025-2026: Looking Back, Looking Ahead,” even included Craig Fuller, CEO of SONAR and FreightWaves, as he and his colleague Zach Strickland are featured analysts on the State of Freight webinars.
At the Trimble conference, Fuller was joined by Bloomberg’s Lee Clasko and MIT’s Center for Transportation and Logistics’ Angela Acosella to discuss a market landscape that attendees aren’t sure whether to describe as half-full or half-empty.
As FreightWaves does in covering the State of Transportation webinars, here are five from the Trimble (NASDAQ: TRMB ) panel that will be held here.
The reaction of the markets to the tariff policy
Klaskov said one word to describe what has happened to the market this year is “chaos.” “Going into the year, we were very excited after the election that the Trump administration would bring us lower taxes and less regulation,” he said. “The business behind it was going to be great.”
Markets expected tariffs on China, Klasko said. And then all of a sudden, the tariffs were against everybody, and that created a lot of uncertainty in the supply chain. We are still dealing with it.
“Chaos is the only thing I didn’t expect.”
Acochella talked about the impact of that chaos. He said the announcement of possible tariffs was met with uncertainty. “Did it pass?” he said of the reaction. “Was there a pullback? How much was it going to be? And that created a lot of uncertainty.” The result will be shippers ordering more than usual, “but then reducing it because now we have all this inventory but no demand for it,” Akosella said.
Demand problem
With so much focus on capacity and the possible impact on it of cracking down on different categories of drivers, the question of volume can get lost in the mix. Fuller, who a year ago made public predictions about the end of the transportation recession only to dismiss the prediction, cited falling demand as the main reason.
He said: Sufficient capacity had been removed from the market, that the forecast of the end of the transportation stagnation was justified. “What we anticipated was that the volume should remain high,” he added.
But based on SONAR’s Outgoing Tender Volume Index (OTVI), which measures volume on a national basis, Fuller said, “What we’ve seen is probably the biggest drop in volume, certainly since we’ve been tracking data since 2016.” He added: Other indices such as Kas index also show the same situation.
The issue is primarily, Fuller said, “a very significant industrial recession.” “The question now is how long we’re going to stay in this pretty awful transportation market that’s not capacity-driven,” he said.
Akosella noted that previous shipping slumps ended with one-time events, such as the introduction of the ELD in 2017 that reduced capacity, or the shipping boom caused by COVID. But for the current transportation slump, he said, “We haven’t seen anything big enough to really shake up the whole market that will increase activity.”
Shipping as a front in immigration wars
Getting drivers off the road through the implementation of various regulations is an issue and a goal. But Fuller said it’s part of a bigger picture that tackles immigrants and immigration on multiple fronts, and trucks play a key role in the debate.
“Trucks are kind of the center and ground zero of this administration’s immigration story,” Fuller said. This administration believes that immigrants are a challenge and a problem, and trucking provides a safe place for the administration to have that conversation with the American people.
The main feature of that conversation is the issue of safety and immigrant drivers. The average American watching a news segment about an immigrant father who is “pulled from his home with young children can only feel sympathy for these people.”
But if the issue is whether foreign-born drivers are driving an 18-wheeler through lax enforcement of licensing and other laws, the argument changes.
“So any time there’s a (truck) accident with an immigrant, you’re going to have a situation where the government is going to focus on that,” Fuller said. Statistically, according to Fuller, about 10 accidents per week involve an immigrant driver.
Future slide in driver numbers
There was widespread discussion of cracking down on foreign-born drivers, either by enforcing English language requirements or pressuring states to withdraw indirect CDLs, which are mostly issued to non-US drivers.
Fuller turned to a recent report commissioned by JB Hunt (NASDAQ: JBHT ) by renowned transportation economist Noel Perry to come up with the numbers.
The article written by Perry begins by estimating that 25 percent of transportation workers are immigrants, “because the difficulty of transportation work attracts immigrants, similar to difficulties in construction and agriculture.” He then estimated that about 8 percent of trucking workers are undocumented.
If the Trump administration’s efforts to remove illegal drivers from the road are successful, it would “reduce the driver population by approximately 16 percent, or 614,000 drivers,” Perry wrote.
A threat to that population of drivers is CDL revocation for lack of English proficiency, Perry wrote. Removal of drivers due to lack of documents related to legal immigration status; and final CDLs granted to non-resident drivers.
Fuller pointed to one possible effect of taking many drivers off the road: ending the parking crisis. “If we actually eliminated 600,000 drivers, how much of the truck parking problem would it solve?” he said “I think it will be interesting to see if this is a permanent problem.”
Are the drivers losing the catalyst towards a stronger transport market?
Kaslow, who has experience as a sell-side analyst in the transportation sector, said last summer that he was “probably as pessimistic as I am.” But he said it was “gradually becoming more positive” and a possible reduction in capacity due to drivers being off the road was the main reason.
This has made Coslow more confident about trucking, but his views on the economy have been decidedly bearish. Many retailers are eating at least part of the tariffs, he said. But he said the short-term phenomenon could end, leading to “more inflation and price pressures in the coming months. It will be very interesting to see how consumers react to that.”
But his pessimism was not so great as to prevent him from predicting, “I think the second half of next year won’t be so bad.”
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