The freight market is “underperforming” and “sub-seasonal,” weighed down by tariff and economic uncertainty. The expected normalization of new truck and trailer orders has not only failed to materialize, but slumping demand has forced further production reductions.
These were some of the common phrases that executives with publicly traded trucking fleets and equipment manufacturers used to describe the current environment in recent third-quarter earnings reports and conference calls.
There was optimism that clarity on trade policy, interest rate cuts, and results from the Trump administration’s crackdown against non-English-speaking truck drivers could provide U.S. truckers with some long-awaited relief. But executives across the freight transportation sector were preparing for at least several more challenging quarters.
“We haven’t seen that demand grow like we would typically see from the third to fourth [quarter] when you have a strong peak season,” said Adam Miller, CEO of Knight-Swift Transportation Holdings Inc.
“For what is outside of a broad economic recession or what I’d call a ‘hard emissions change,’ this is the sharpest decline in truck orders that many of you who have been here a long time have witnessed,” said Mark Smith, chief financial officer at Cummins Inc.
“Looking forward, these conditions are likely to persist into the balance of the year,” said Mark Rourke, CEO and president of Schneider.
Manufacturing activity shrinks again in October
The Institute for Supply Management’s latest monthly survey on manufacturing activity was in alignment with the comments of these executives.
ISM said its factory index showed contraction for the eighth straight month in October. In addition, all four of ISM’s demand indicators — new orders, new export orders, backlog of orders, and customer inventories — improved from September, but their readings were below 50, which indicates contraction.
“Ongoing trade friction is still resulting in diminished demand, as evidenced by the 57% of panelists’ comments citing soft demand due to tariffs and uncertain U.S. economic policy,” said Susan Spence, chairwoman of ISM’s Manufacturing Business Survey Committee.
U.S. government shutdown adds further strain
The effects of the U.S. government shutdown that began on Oct. 1 were being felt in ways beyond the airport travel chaos that has dominated the headlines. For example, several fleets that move freight for the U.S. Department of Defense or other government agencies said in late October they were seeing fewer shipments.
Separately, analysts said the delay in providing SNAP benefits to lower-income Americans at the start of November would disrupt regular shipments to grocery stores and other retailers.
In addition, the University of Michigan said its preliminary consumer sentiment index dropped to 50.3 this month, the lowest level since June 2022, from a final reading of 53.6 in October. “With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy,” said Joanne Hsu, director of the survey.
OEMs lower outlook as fleets slow purchasing decisions
Martin Lundstedt, president and CEO of Volvo AB, said the “wait-and-see mode” among fleets has led the company to trim its 2025 industrywide Class 8 North American retail sales outlook to 265,000 units, down 10,000 from its prior forecast. For 2026, Volvo is forecasting sales of 250,000 heavy-duty trucks.
Paccar’s latest projection for the U.S. and Canadian Class 8 market is 230,000-245,000 trucks this year and 230,000-270,000 next year. CEO Preston Feight added that if the Environmental Protection Agency’s heavy-duty NOx regulation is delayed or changed, sales would be at the lower end because it would limit any potential pre-buy.
Brent Yeagy, president and CEO of trailer manufacturer Wabash National, said across the industry, more customers are continuing to delay spending decisions. “That includes larger fleets, influenced by ongoing housing market stagnation, a sharp reduction in household relocations and persistent uncertainty around consumer confidence,” Yeagy said.
Schneider is one fleet that acknowledged it had paused some orders of new equipment originally planned for delivery before the end of 2025. Likewise, Ryder System President and COO John Diez noted that some leasing and dedicated customers and prospects were delaying decisions due to the uncertainty.
With fewer trucks and trailers being assembled and shipped, component manufacturers are feeling the brunt of this slowdown.
“The North American market is in a very challenging time. Truck production rates declined significantly in the third quarter and a near-time recovery appears unlikely, said Marc Llistosella, CEO and chairman of Knorr Bremse, parent of Bendix Commercial Vehicle Systems.
Knorr Bremse, Cummins, and Allison Transmission were among the suppliers reporting declines in overall sales, with the majority of the blame on the Class 8 market in North America.
Glimmers of hope on the horizon?
Adam Satterfield, chief financial officer of Old Dominion Freight Line, said he believes there is pent-up freight demand, but that it won’t fully materialize until there is more certainty on trade policy.
Several fleet executives noted that shippers are taking notice of the Trump administration’s crackdown and are now more willing to accept modest freight rate increases to ensure truck capacity later. The eventual reopening of the U.S. government will provide a boost, as will lower interest rates.
In response to a question about the overall health of the industry, Rusty Rush, CEO of the truck dealership chain Rush Enterprises, summed up the sentiment of many: “I have some optimism,” he said. “It’s just not over the next six months.”
