2024 Trucking Industry Overview

In 2024, driver shortages remained a concern, but the focus of the trucking industry shifted from addressing workforce gaps to managing market overcapacity. This change in priorities reflected a growing need to optimize the utilization of existing capacity, rather than solely increasing the number of drivers. Despite early expectations for a quicker recovery, the pace of recovery remained slower than anticipated throughout the year. High interest rates and persistent inventory imbalances continued to influence market conditions, delaying a full rebound.

Notable Acquisitions

In 2024, several major players in logistics made strategic acquisitions. Forward Air (NASDAQ: FWRD) merged with Omni Logistics, but its stock has dropped 70% since the August 2023 announcement. Ryder System (NYSE: R) expanded its dedicated fleet by acquiring Cardinal Logistics for $297 million, adding 3,400 drivers, 2,900 trucks, and 200 locations. TFI International (NYSE: TFII) acquired flatbed carrier Daseke for $1.1 billion, doubling its specialty truckload unit. 

RXO (NYSE: RXO) became the third-largest freight broker in North America after acquiring Coyote Logistics from UPS (NYSE: UPS) in September. Schneider National (NYSE: SNDR) acquired Cowan Systems for $390 million and additional real estate for $31 million in November. Lastly, FedEx announced plans to spin off its less-than-truckload unit, FedEx Freight, into a separately traded public company.

Firms in the U.S. have announced supply chain-related layoffs totaling 9,746 workers over the last five months, according to the Worker Adjustment and Retraining Notification (WARN) Act notices. These moves reflect ongoing consolidation and growth in the logistics sector as companies adjust to market conditions.

2025 Forecast

Capacity Rebalancing

The truckload market is undergoing significant rebalancing, with private fleets capturing an increasing share of freight volume. This shift indicates signs of stability, as inventory levels are aligning more closely with demand. The high borrowing costs and cautious consumer spending are expected to contribute to this alignment, fostering a more balanced supply-demand dynamic. As retail inventory adjustments stabilize and replenishment cycles slow, freight demand is anticipated to decelerate further.

Geopolitical Considerations

Shifting trade policies, economic sanctions, and evolving cross-border regulations are likely to have a considerable impact on freight flows, particularly for fleets engaged in international or intermodal logistics. As geopolitical dynamics evolve, businesses will need to remain agile, adjusting their strategies to navigate these changes and minimizing potential disruptions to their supply chains.

Looking Ahead

For most fleets, 2025 will be a year of strategic positioning, rather than aggressive expansion. As the market continues to improve, fleets are adopting a more cautious approach, holding back on large-scale expansion plans and prioritizing conservative capital investments. Additionally, some states are moving forward with stricter emissions regulations, adding further complexity to the regulatory landscape. The push toward zero-emission vehicles (ZEVs) is accelerating, which creates a growing concern for cybersecurity in 2025.

 There is also significant uncertainty about how the new presidential administration will address federal regulations and incentives, potentially altering the industry’s trajectory. The ongoing threat of AB-5-style legislation remains a key concern, with the potential to significantly impact the trucking sector—particularly regarding driver classification and labor practices.

As the industry adapts to these evolving conditions, fleets will need to navigate a complex landscape marked by economic, regulatory, and geopolitical shifts, all while positioning themselves for long-term stability and growth.

Industrial/Trucking Real Estate in 2025

Given the current saturation of the trucking industry, there is a significant barrier to entry for new companies. However, demand for new terminal development is experiencing an upward trend. As some of the industry’s leading companies expand and occupy vacant Yellow Trucking terminals, many are also consolidating operations by vacating smaller facilities in favor of larger spaces to support their growth. The majority of truck terminals are owner-users, but when larger companies like Yellow and United Rental go bankrupt, the terminals are acquired almost immediately. 

The trucking sector within industrial outdoor storage (IOS), which gained significant mainstream attention during the COVID-19 pandemic as e-commerce surged, has since matured. This growth has been accompanied by increased investment in truck terminals, maintenance facilities, and parking bays, along with more competitive pricing in the market. The nation’s largest banks by assets have shown clear interest in the investment of trucking properties throughout the last few years. In 2023, the cap rate for industrial real estate in the U.S. was 5.35%, and it is forecast to decline to 4.85% by the end of 2026, according to Statista.

National Industrial Cap Rates 

Source: Statista

Vacancy Patterns

Industrial property outlooks suggest that vacancy rates are likely to stabilize in early 2025, before gradually decreasing in the second half of the year as supply gets absorbed and new deliveries slow down. At the end of 2024, the national industrial vacancy rate reached 6.9%. 

The market observed a decline in the number of private owners with national tenants. This is primarily due to national tenants either purchasing the terminals themselves, or vacating and relocating to alternative sites. Additionally, large national tenants have been capitalizing on recent capacity challenges, while smaller trucking companies have faced financial difficulties, leading to an increase in bankruptcies.

Construction Pipeline

Construction costs have played a role in the slowdown of industrial development. As of March 2024, construction costs rose by 2.6%, while building costs increased by 3.8%. By the end of Q3 2024, the amount of industrial square footage under development had dropped 43% compared to 2023. Smaller properties have experienced the greatest demand, with half of the new leases signed over the past year being for spaces under 100,000 square feet.