The great capacity squeeze shows no sign of letting up

American shippers hoping the summer's freight rate fever would break by autumn received a cold dose of reality this week. Fresh market data published Wednesday showed spot rates continuing their seasonal slide from the July 4 peak, down more than 17 per cent over four to five straight weeks, yet still sitting roughly 50 per cent above year-ago levels. The load-to-truck ratio eased fractionally to 18.62, but that compares with 10.34 a year earlier. This is not a market cooling. It is a market resetting to a permanently higher floor.

The cause is not demand, which has been broadly flat, with dry van volumes up only around 1 per cent this year. It is supply, and specifically Washington's multi-front enforcement campaign. The non-domiciled CDL rule has cut renewal eligibility for roughly 97 per cent of an estimated 200,000 licence holders, and a court this month refused to force California to resume renewals while Republican-led states lined up behind the FMCSA in the ensuing litigation. Around 6,800 CDL training locations have been shut down this year, the largest such action in the agency's history, while a steady drumbeat of electronic logging device revocations continues to push non-compliant carriers off the road. Trucks that exit under enforcement pressure do not come back quickly.

The near-term outlook offers shippers little relief. Brake Safety Week runs from 23 to 29 August, with inspectors across the US, Canada and Mexico focusing on drums and rotors, an annual event that reliably takes capacity offline just as import freight flows inland ahead of peak season. Carriers that survived the brutal post-pandemic downturn are finally enjoying pricing power, with refrigerated operator Marten Transport among those reporting improved freight selection and rising rates. For the survivors, the squeeze is the reward.