Trucking's Tight Turn

The trucking industry offers some opportunities right now. After a huge buildup in supply when COVID was happening and a lot of goods were shipping, the industry suffered for two or three years from overcapacity and now is to the point where supply is leaving the industry. Some of that is profitability. Some of that is also from government regulations and enforcement of English-language proficiencies on nondomiciled CDLs such that tender rejection rates are rising, freight rates are rising. And there’s also particular tightness in the flatbed portion of the trucking sector. And that is due to some of the supply issues. But also demand is really picking up for shipments to data centers as large equipment gets delivered to data centers for power generation or power backup and things like that. It’s been a really acute tightening in the flatbed space, and that’ll spill over into other portions of trucking as drivers might decide to exit the truckload side and get over to the flatbed side when the rates are higher. When tightness hits the trucking sector, rates really inflect higher pretty fast, and it can take the market by surprise. So earnings estimates are higher next year from the sell side. But they don't—they're cautious. They don't really account for how strong this industry can inflect and how fast the pricing can happen, particularly in the back half of the year, when demand is strong for holiday shipping. So we’re likely to see a very strong inflection in rates in the fall, and that’ll carry over to estimates for the second half of ’26 and even into ’27.

Filmed March 2026

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