Independent owner-operators have endured a tough freight market in recent years, with declining rates and soft demand squeezing margins. Now, new data suggests the market may finally be turning a corner. Freight rates have ticked up year-over-year for the first time in two years, signaling a potential end to the downturn. However, challenges remain: freight volumes are still weak, and competition for loads is fierce. How can independent motor carriers use these emerging trends to optimize their operations and boost profitability? This article examines current market conditions and offers solution-oriented strategies for small motor carriers to leverage the evolving landscape to their advantage.

Market Trends: Freight Rates Show Signs of Recovery

According to Cass Information Systems, January saw a modest 0.8% uptick in truckload linehaul rates compared to a year earlier – the first annual increase since late 2022. This positive inflection comes after a prolonged slump that saw rates fall 10% in 2023 and another 3% in 2024. Recently, rates have climbed slowly (five consecutive months of incremental gains) even as freight volumes remain soft. A bout of national winter storms in January gave spot rates a short-lived boost, but the overall trend is one of a slow recovery rather than a rapid rebound. As the Cass report put it, “for those looking for something similar to the past two cycles, expect a long wait,” even though the cycle “is moving in a positive direction.”

Freight demand is still a concern – shipment volumes in January were down 8.2% year-over-year, the steepest drop since the pandemic shutdowns of 2020. Part of the reason is that private fleets (trucks operated by retailers and manufacturers) are hauling more freight than ever, which creates additional challenges for smaller carriers vying for loads. In other words, there are fewer loads to go around in the spot and contract market.

On the capacity side, however, there’s a silver lining. The excess trucking capacity that drove rates down is finally shrinking. Many small carriers unfortunately exited during the downturn, and even large fleets scaled back growth plans. This reduced capacity has tightened the market enough that rates are inching up even with sluggish demand. The Cass report emphasized that “while volumes remain soft, capacity has adjusted sufficiently to yield modestly higher rates.” When accounting for lower shipment volumes, Cass estimates freight rates (including fuel) likely rose about 4.3% year-over-year – marking the fifth straight month of rate growth. Analysts expect this trend to continue as a gradual upcycle, with initial forecasts calling for a low- to mid-single-digit percentage rise in rates through 2025.

The consensus is that a significant rebound will take time, but the direction is slowly upward. For independent owner-operators, this means the worst may be behind us – but it’s still crucial to navigate carefully and maximize every rate opportunity as the market recovers.

Key Challenges for Independent Motor Carriers

Even with tentative improvements, owner-operators face several ongoing challenges in the current market:

• Soft Freight Demand: Overall freight volume remains relatively weak. Fewer loads available mean harsher competition for each haul. The Cass Freight Index showed shipments fell over 8% year-over-year in January—a clear sign that demand has yet to rebound. Shippers and brokers have the upper hand in rate negotiations when there are more trucks than shipments.
• Oversupply and Competition: The industry is still working through an overcapacity hangover from the 2021 freight boom. There are still too many trucks chasing too little freight in many lanes. Larger carriers and private fleets also scoop up loads, often at rates independent operators struggle to match. In fact, private fleets are moving more freight than ever before, which cuts into the pie of available loads for independents. Huge fleets also enjoy economies of scale – they can absorb costs and underbid on contracts to win business, something a single-truck operation can’t easily afford. This ability of big carriers to run at near break-even gives them a competitive edge on price, making it hard for independent owner-operators to compete solely on rates.
• High Operating Costs: Despite falling spot rates over the last year, the cost of running a truck didn’t drop in tandem. Fuel prices spiked in 2022 and remain volatile, maintenance and parts are expensive, and insurance and regulatory costs continue to rise. In a recent OOIDA survey, owner-operators cited high fuel costs, inflation, and overcapacity as major concerns impacting their businesses. When rates are low, these high expenses can quickly eat up any profit – or put carriers in the red.
• Limited Bargaining Power: Brokers and shippers hold more leverage in a loose freight market. Many independent owner-operators felt pressure to accept unprofitable loads just to keep moving in 2023. When you’re one truck among many, it’s tough to demand higher pay without an alternative lined up. This lack of negotiating power has forced some owner-operators to take cheap freight or sit idle, neither of which is sustainable for long.

These pressures have pushed many owner-operators to consider drastic changes to stay afloat. More than half of surveyed independents said they planned to adjust their business in 2023, whether by downsizing, switching regions, or even leasing onto larger carriers or selling their equipment. It has indeed been an adapt-or-die environment. The good news is that by addressing the challenges with smart strategies, independent carriers can strengthen their position and start improving the rates they earn.

Leveraging the Coming Upturn to Your Advantage

The freight market is cyclical, and better days are on the horizon after a long downcycle. Analysts predict only a modest increase in rates in the near term (low to mid-single digits in 2025), but even modest gains will improve the situation for carriers who have been operating at razor-thin margins. As capacity tightens and the economy eventually picks up, independent carriers stand to regain leverage. Those who survived the shakeout can benefit from higher rates as supply and demand rebalance. Remember, when many competitors exit, the motor carriers still on the road become that much more valuable to shippers. We’re already seeing the early signs of this: rates creeping up despite weak volumes, which suggests the market floor has been reached and is lifting. 

To make the most of the coming upturn, independent motor carriers should start positioning themselves now:

• Stay Financially Disciplined: As rates improve, it can be tempting to let costs creep up or to relax the tight belt you’ve been on. Continue running a lean operation and build a cash cushion if possible. This will help you weather any remaining slow months and allow you to invest when the time is right (for instance, in truck upgrades or an additional trailer to expand services). Carriers with healthy finances will be able to capitalize on new opportunities as fast as freight demand rises.
• Keep an Eye on the Economy: Freight demand is driven by the broader economy. Monitor key indicators that affect freight volumes – consumer spending, housing starts, industrial production, inventory levels, etc. For example, if you haul a flatbed and see housing construction picking up, that’s a sign to prepare for more lumber and building material loads. If retail sales surge, dry van demand might follow. You can anticipate which lanes or regions might heat up by staying informed and positioning your truck accordingly. Recognizing the early signals of a market rebound (or a regional surge) can give you a head start in achieving higher rates where capacity is about to tighten.
• Strengthen Relationships: The relationships you cultivate with brokers and shippers can pay dividends in a stronger market. If you’ve been reliable and fair during the downturn, your shipping partners will remember that when things turn around. They may start routing more premium loads your way or agree to rate increases more readily as overall rates rise. Carriers and brokers alike prefer to work with people they trust. So keep delivering excellent service and communicate any issues. Your network is a form of leverage – the better your reputation, the more negotiating power you’ll have when capacity gets tight.
• Be Ready to Adjust Pricing Strategies: Don't be shy about adjusting your pricing when the market shifts from a shipper’s market to a carrier’s market. If spot rates in your lanes jump in mid-2025 and you’re still locked into a contract from 2024, you could be leaving money on the table. It may make sense to cut shorter-term contracts or include rate-adjustment clauses tied to market indexes. That way, you can renegotiate more frequently and capture the upside of rising rates. In a hot market, the spot market can become more lucrative than dedicated contract freight – be prepared to shift more capacity to spot loads if they start paying better than your contract rates (keeping in mind dedicated lanes were a good strategy during a cold market). Essentially, stay flexible with your business mix. The goal is to always allocate your truck to wherever the highest yield is, balanced against reliability. During the downturn, that often meant clinging to any contract route you could get; during an upturn, it might mean cherry-picking more spot loads and utilizing well-equipped loadboards like TrueNorth to find the best spot rates. Monitor market conditions to know when it’s time to change tack.

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In conclusion, independent motor carriers have navigated a very difficult freight environment, but there is reason for optimism. The latest data shows that freight rates are finally trending upward (albeit gradually), and experts expect conditions to improve as capacity and demand rebalance. By negotiating shrewdly, running efficiently, and leveraging every available advantage, small trucking businesses can not only survive the tail end of the downturn but set themselves up to thrive as the market rebounds. Every penny saved in operations and every cent per mile gained in negotiation goes straight to your bottom line – and those gains compound when the freight cycle swings back up.

The road ahead will still have challenges, but the carriers who adapt and persist will reap the rewards. Remember that you have control over many aspects of your business: how you budget, which loads you accept, how you service customers, and how you respond to market signals. By controlling what you can and staying agile with what you can’t, you put yourself in the best position to improve your freight rates and profitability. The trucking market may be unpredictable, but owner-operators can ride the wave of the subsequent rebound and achieve lasting success in the industry with the right tools. 

Better rates are attainable – and with the help of TrueNorth, more than 100,000 freight loads have been transported. Leverage it to take advantage of increasing spot rates in 2025 and beyond. Safe travels and successful negotiating!