SHIPPERS ARE HOLDING
RATES DOWN
AND CARRIERS ARE PAYING FOR IT

Here's the situation in plain terms: it costs more to run a truck today than it ever has. Fuel, insurance, maintenance, truck payments, compliance — all of it is up. But what shippers are paying to move freight hasn't kept pace. In a lot of lanes, rates are still sitting at levels that made sense two or three years ago, before costs went through the roof.

That gap — between what it costs to operate and what loads are paying — is the core problem in the market right now. And it's not an accident. It's the result of a specific set of conditions that shippers are using to their advantage, and carriers are the ones absorbing the difference.

WHY SHIPPERS HAVE THE LEVERAGE RIGHT NOW

It comes down to one thing: there are more trucks than there are loads. When capacity is loose — meaning there are plenty of available trucks chasing a limited number of shipments — shippers don't have to compete for service. They can post a load at a low rate and wait. Someone will take it, because the alternative for that carrier is sitting empty.

This is basic supply and demand, and right now it's working entirely in the shipper's favor. The freight recession that started in 2022 flooded the market with capacity — a lot of people got into trucking during the boom years when rates were high, and that capacity never fully cleared out. Shippers know this. Their logistics teams track load-to-truck ratios, they know what the spot market looks like, and they negotiate accordingly.

The result is that shippers have been able to push rates down — or simply refuse to raise them — even as the cost to actually move freight has gone up significantly. They're not doing anything illegal or even unusual. They're just using the leverage the market gave them.

WHAT IT ACTUALLY COSTS TO RUN A TRUCK

A lot of people outside the industry — and honestly some inside it — don't fully understand how thin the margins are. When a carrier quotes a rate, that number has to cover a lot before anyone makes a dollar.

Diesel at $5.50 a gallon on a truck getting 6–7 miles per gallon means you're spending roughly $0.80 per mile just on fuel. Add insurance ($0.25–$0.40/mile for a small carrier), truck payment or lease ($0.30–$0.45/mile), maintenance and tires ($0.15–$0.25/mile), and you're already at $1.50 to $2.10 per mile before you pay yourself anything. Factor in deadhead miles — the empty miles you run to get to a load — and the real cost per loaded mile goes up further.

When spot rates are sitting at $1.85 per mile, you're not making money. You're slowly going broke while staying busy. That's the trap a lot of carriers are in right now — they keep running because stopping feels worse, but the math is working against them every mile.

“I had a broker offer me $1.72 a mile on a 600-mile run last month. My fuel alone was going to be over $1.10 a mile. I turned it down and sat for two days before I found something that at least covered my costs. That's where we are right now.”

— Owner-operator, Southeast dry van

HOW THIS AFFECTS CARRIERS, BROKERS, AND DRIVERS DIFFERENTLY

For carriers — especially small ones — the pressure is existential. Every load that doesn't cover costs is a step closer to shutting down. Large carriers have more tools to manage this: fuel programs, volume discounts, dedicated contract lanes with better rates, and the ability to absorb losses in one area while making money in another. Small carriers don't have those buffers. Every load has to work on its own.

For brokers, the dynamic is more complicated than it looks. Brokers sit in the middle — they buy capacity from carriers and sell it to shippers. When shippers push rates down, brokers feel pressure to compress their margins or push that pressure onto carriers. Some brokers are transparent about this and work with carriers fairly. Others use the loose market to widen their spread, paying carriers less while keeping shipper rates the same. That's a real tension in the industry right now, and it's why carrier-broker relationships are strained.

For drivers, the rate depression hits in a different way. Company drivers at carriers that are struggling may see pay cuts, reduced miles, or layoffs. Owner-operators feel it directly in their take-home. When the load doesn't pay enough, the driver doesn't get paid enough — it's that simple. Some drivers have responded by being more selective about loads, which is the right move financially but requires having enough cash reserves to sit and wait. Not everyone has that option.

WHY THIS TENSION EXISTS AND WHAT WOULD CHANGE IT

The fundamental tension is that shippers and carriers have opposite interests when it comes to freight rates. Shippers want to move goods as cheaply as possible. Carriers need rates high enough to cover costs and make a profit. In a balanced market, those interests find a middle ground. In a market with excess capacity, shippers win and carriers lose.

What changes the dynamic is capacity tightening. When there aren't enough trucks to cover available freight, shippers have to compete for service and rates go up. That's happened before — it happened in 2018 and again in 2021 — and it will happen again. The question is when.

The exits happening right now — small carriers shutting down, owner-operators surrendering their authority — are actually the mechanism that will eventually tighten capacity. Every carrier that leaves the market is one less truck competing for loads. At some point the math flips. But that process takes time, and in the meantime, the carriers still running are subsidizing the current market with their own margins.

There's also a longer-term structural issue: shippers have gotten very good at logistics optimization. They've invested in technology, built out their own private fleets, and reduced their dependence on the spot market. That means when capacity does tighten, the rate spike may not be as dramatic as it was in 2021. The market is maturing, and carriers need to think about that.

The rate situation isn't going to fix itself overnight. Shippers aren't going to voluntarily pay more when they don't have to. The market will eventually rebalance, but the carriers who make it to that point will be the ones who managed their costs tightly and didn't run themselves into the ground chasing cheap freight.

Understanding why the market is the way it is doesn't make it easier to deal with — but it helps you make better decisions inside of it. And right now, good decisions are the difference between staying in business and becoming another exit statistic.