Rising Carrier Exits Signal Major Shifts in Freight Industry Dynamics

The U.S. trucking industry is experiencing unprecedented upheaval, with carrier exits hitting a 12-month high in April 2025—reflecting a market in rapid flux. As freight flows become more unpredictable, understanding these shifts is crucial for navigating America's evolving supply chains.

Key Insights:

• The record number of carriers leaving the market reflects a culmination of challenges. Industry reports point to a complex interplay of factors, including fluctuating freight rates, the high cost of fuel, insurance, and labor, and an overcapacity that has squeezed profit margins.

  
  

• The temporary reduction in tariffs has led to a rush of imports from China, with ocean carriers raising rates by up to 50% and a surge of containers expected at U.S. ports in the next 4–6 weeks.

  
  

• Ocean freight rates are spiking up to 50%, capacity is tightening, and logistics professionals must navigate increased fraud risk, market churn, and regulatory challenges. Discover how these shifts are reshaping freight planning and risk management for 2025.

Market Paradox: Exits and Entries Surge Simultaneously

According to the latest May ITS Supply Chain Report from ITS Logistics, persistent weakness in the freight market and fluctuating tariffs are fueling significant market churn. The report notes that carrier departures have climbed to their highest level in a year, while the number of new carrier registrations surged by 48% compared to the previous month and 30% over the past year.

Carrier exits reached a 12-month high in April 2025, while new carrier authorities simultaneously jumped 48% month-over-month.

Rising carrier exits are reshaping the freight industry, signaling a period of significant transition marked by both challenges and opportunities. According to the May 2025 ITS Logistics Supply Chain Report, carrier departures reached a 12-month high, with 7,474 exits in April—a 26% increase from the previous month. This surge in exits comes as the industry grapples with persistent overcapacity, soft freight demand, and volatile tariffs, all of which are driving high market turnover and squeezing carrier margins.

While the overall number of active trucks in the U.S. saw a slight uptick, mid-sized and large fleets experienced month-over-month declines, highlighting the uneven impact across different segments. The volatile environment has also led to a jump in new carrier authorities, as new entrants attempt to capitalize on any available opportunities.

Spring usually brings an influx of carriers to the spot market, and last month followed that pattern, even with the broader trends in freight,

-explained Josh Allen, Chief Commercial Officer at ITS Logistics.

Rates for both refrigerated and dry van shipments changed only slightly, indicating weak demand in important seasonal sectors such as food service and residential construction. Still, a wave of imports from China expected soon could tighten capacity and push rates higher, at least temporarily.

Industry analysts note that this extreme turnover is creating fertile ground for fraud, especially for shippers lacking established, trusted logistics partners. The aftermath of the pandemic-driven boom left the market with excess capacity, which has now resulted in fierce competition for loads, aggressive bidding, and longer wait times at docks. Smaller and undercapitalized carriers are particularly vulnerable, often forced out as rates remain below operating costs

Trade War Pause Triggers Pacific Shipping Surge

Following a bilateral agreement where the United States reduced baseline tariffs on Chinese imports from 145% to 30%, and China reciprocated by lowering duties on American products from 125% to 10%, importers are racing to capitalize on this temporary three-month ceasefire in trade tensions. This rush to move goods across the Pacific has created a capacity crunch, prompting ocean freight carriers to implement significant rate hikes—potentially up to 50% within the coming week. Major shipping lines are now quoting rates for voyages scheduled through late May that are approximately $900 per Twenty-foot Equivalent Unit (TEU) higher than the previous week's pricing.

Why Are Carrier Exits Surging?

The sharp rise in carrier exits has created extreme turnover in the capacity market. This environment heightens the risk of freight fraud, particularly for shippers without established, trusted logistics partners. As new, less-vetted carriers enter the market to fill gaps, shippers face greater challenges in ensuring reliability and security.

Several factors are driving this unprecedented turnover:

• Market Downturn: Prolonged soft freight demand and low rates have squeezed margins, especially for smaller and undercapitalized carriers.

  
  

• Tariff Volatility: The temporary reduction in U.S.-China tariffs has triggered a rush to import goods, straining transportation networks and driving up ocean carrier rates by as much as 50%.

  
  

• Regulatory Pressure: Increasing compliance demands and new laws, such as California’s AB5, are raising operational costs and complexity.

  
  

  
  

The recent wave of carrier exits is making logistics planning more complex and risk-prone. Shippers must strengthen their vetting processes, diversify carrier relationships, and enhance monitoring to mitigate fraud and capacity risks.

Logistic Industry in “Wait and See” Mode

The logistics industry remains in a state of limbo, with global supply chains struggling to adapt to rapid-fire policy changes and geopolitical maneuvering. While the temporary tariff relief has provided a short-term boost, the long-term outlook is clouded by the prospect of renewed trade tensions, ongoing inflationary pressures, and the challenge for the Federal Reserve to balance inflation control with economic growth.

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Sources:

1. www.its4logistics.com

2. www.mhlnews.com