The fourth quarter edition of the U.S. Bank Freight Payment Index, which was released today, showed gains and declines, for freight shipments and expenditures, to varying degrees. This report, which was initially launched in the third quarter of 2017, is comprised of data on freight shipping volumes and spend on both a national and regional basis. The report’s data is based on the actual transaction payment date, highest-volume domestic freight modes of truckload and less-than-truckload and is seasonally- and calendar-adjusted. Its historical data goes back to 2010, with a base point of 100, and its index point for each subsequent quarter marks that quarter’s volume in relation to the preceding quarter. U.S. Bank Freight Payment's business processes more than $43 billion in annual freight payments for some of the world’s largest corporations and government agencies. The report’s first quarter shipment index value, at 76.1, increased 1.5% compared to the fourth quarter, which was down 2.9% annually, and fell 4.9% annually. The report explained that while this sequential improvement is notable, freight volumes remained at historically subdued levels, adding that the annual decline highlights persistent challenges in the freight market for both motor carriers and shippers. And for all of 2025, the shipment index fell 9.9% annually compared to the 2024 average when adjusted for the year—and was still less than half of the 20.4% decline in 2024. And on a regional basis, shipments saw: a 1.3% sequential decline and a 5.4% annual gain in the Western U.S.; a 3.5% sequential gain and a 3.3% annual decline in the Midwest; a 4.2% sequential increase and a 12.1% annual increase in the Northeast; a 5.4% sequential increase and a 25.4% annual decrease in the Southwest; and a 2.4% sequential decline and a 5.9% annual decline in the Southeast. As for spending, the second quarter spend index value, at 191.9, was up 4.6% sequentially and up 5.2% annually, its first annual gain in three years. This marked the third straight quarterly increase, with the report observing that it serves as an indication that shippers are incurring higher costs to move only slightly greater freight volumes. “Despite uneven shipment volumes, fourth quarter spending rose nearly everywhere, driven mainly by higher freight rates,” the report noted. “This rate increase was evident because shippers in regions with declining freight still had to pay more to transport less, while regions with rising freight volumes experienced even greater spending hikes. Because diesel prices held steady or decreased from the third quarter, fuel surcharges were not behind the rise in total costs, leaving shrinking capacity as the explanation for price increases.” Spend data largely showed gains on a regional basis, including: West, up 2.6% sequentially, and up 9.4% annually; Southwest, up 12.6% sequentially, and up 16.8% annually; Midwest, up 5.0% sequentially, and up 0.1% annually; Northeast, up 5.5% sequentially, and up 16.7% annually; and Southeast, up 0.7% sequentially, and down 1.3% annually. Bobby Holland, U.S. Bank director of freight business analytics, said that the capacity story is the defining theme of Q4. “Shippers paid significantly more to move slightly more freight—clear evidence that available truck capacity continues to tighten,” he said. “Between fleet exits and carriers reducing their rosters, the industry is feeling the effects of prolonged contraction.” American Trucking Associations Chief Economist and the report’s lead author Bob Costello wrote in the report that in the last quarter of 2025, the national freight market experienced a slight uptick in shipment levels, but industry capacity continued to contract as shipper spending reached its highest point since early 2024. “Capacity in the freight market declined further, driven by several factors,” wrote Costello. “Prolonged market downturns led to reduced rates, prompting carriers to downsize fleets and decrease the number of independent contractors. The year also saw a decrease in the total number of carriers operating. Stricter government regulations and enforcement, including tougher English Language Proficiency standards, removed thousands of drivers from service. The Department of Transportation (DOT) temporarily paused the issuance of non-domiciled commercial driver’s licenses (CDLs) to certain non-citizens and non-permanent residents until full compliance with new DOT regulations was achieved. This rule potentially affected nearly 194,000 CDL holders, although a court case has suspended its implementation for now. There have also been cases of foreign drivers operating without proper work authorization, though new measures are expected to curb such occurrences. Overall, industry capacity contracted in Q4 driving up shipping costs, despite a smaller-than-usual peak-season volume lift. Spot market rates climbed quarter-over-quarter and year-over-year, highlighting tighter capacity across the freight sector.”

Deal announcement and parties involved

Werner Enterprises, a global freight transportation and logistics company based in Omaha, Neb., and recognized as the nation’s seventh-largest truckload carrier, announced this week that it has acquired First Enterprises Inc., operating as FirstFleet, headquartered in Murfreesboro, Tenn. The move is intended to broaden Werner’s dedicated truckload service offerings.

Purchase price and real estate components

Werner said the cash consideration for the purchase is approximately $245 million. In addition to the cash payment, Werner will separately purchase real estate properties directly from FirstFleet.

Including the real estate, Werner values the overall transaction at about $282.8 million. The real estate component comprises 11 properties with an aggregate valuation of $37.8 million.

FirstFleet operations and markets served

Founded in 1986, FirstFleet runs operations across the contiguous 48 U.S. states. The company’s assets include more than 2,400 power units and roughly 11,000 trailers, and it maintains 37 strategically located properties near about 130 customer sites.

Werner highlighted FirstFleet’s capabilities in serving steady, resilient end markets such as grocery, baked goods and corrugated packaging.

Management, headquarters and workforce profile

Werner said it plans to retain most of FirstFleet’s management team and that FirstFleet’s headquarters will remain in Tennessee after closing. FirstFleet operates with a 100% company driver model and reports driver turnover below industry averages.

Strategic rationale from Werner leadership

Chris Neil, Werner’s senior vice president of pricing and strategic initiatives, described the acquisition as a key step in executing the company’s strategy, saying the deal will strengthen Werner’s platform and position it for sustainable, profitable growth.

Werner chairman and CEO Derek Leathers noted that FirstFleet has built durable customer relationships and a reputation for safety and service that align with Werner’s values. Leathers also emphasized that the acquisition adds meaningful scale and deepens Werner’s presence in the eastern U.S.

Financial impact and scale after the acquisition

Werner reported that FirstFleet generated more than $615 million in revenue for the 12 months ended September 30, 2025. On a trailing-12-month basis through that same date, Werner’s stand-alone revenues were about $3 billion; adding FirstFleet lifts combined trailing revenues to roughly $3.6 billion.

Werner said the combined company will operate approximately 7,365 Dedicated trucks and nearly 40,000 trailers, and that FirstFleet’s inclusion will increase Dedicated revenues by about 50%, making Werner the fifth-largest North American Dedicated carrier.

Operational benefits and shareholder effects

Werner expects the East-focused footprint and added density to improve cost efficiency, asset utilization and purchasing power while creating cross-selling opportunities across its customer base. Management characterized the acquisition as immediately accretive to earnings per share and achievable without materially increasing leverage.

Outside perspective and market timing

Ben Gordon, founder and managing partner of Cambridge Capital and of Ben Gordon Strategic Advisors (BGSA), told LM the deal signals Werner’s commitment to its core trucking strengths and will accelerate its dedicated network footprint.

Gordon added that the transaction comes as freight markets may be turning, referencing discussion at the recent BGSA Supply Chain Conference where participants expressed an expectation for a roughly 20% increase in truckload rates. He suggested Werner is expanding while market conditions are near cyclical lows.

Expected advantages for customers and stakeholders

Werner said the acquisition will boost its mix of higher-margin, long-term Dedicated business within Truckload Transportation Services, deepen exposure to resilient sectors such as grocery and baked goods, and provide benefits for customers, associates and shareholders through stronger service density and expanded capabilities.

Key deal facts at a glance

• Acquirer: Werner Enterprises (Omaha, Neb.)
• Target: First Enterprises Inc. / FirstFleet (Murfreesboro, Tenn.)
• Cash purchase price: approximately $245 million
• Total consideration including real estate: roughly $282.8 million
• Real estate: 11 properties valued at $37.8 million
• FirstFleet assets: more than 2,400 power units and about 11,000 trailers
• FirstFleet revenue: more than $615 million for the 12 months ended September 30, 2025
• Combined trailing revenues: about $3.6 billion for the 12 months ending September 30, 2025
• Combined Dedicated fleet: roughly 7,365 trucks and nearly 40,000 trailers

Sector snapshot and prolonged stagnation

The U.S. full truckload (TL) market, valued at roughly $387 billion, has been effectively stalled for about three years, and any recovery has been slow and uneven. Carriers are facing a protracted freight recession driven by excess capacity and soft demand, with industry participants cautiously expanding fleets only in modest increments.

One visible symptom of the downturn: spot rates have dipped below $2 per mile since the spring of 2022, underscoring the weak pricing environment that many operators are navigating.

How tariffs and economic forces are shaping demand

Multiple analysts point to tariff policy and other macroeconomic factors as contributors to the falloff in freight volumes. Market data from Uber Freight quantifies potential impacts of tariff increases on truckload demand:

• A 1% tariff rise could cut TL demand by about 0.15% or more
• A 10% tariff increase could lower demand by roughly 2%
• Tariff levels in the 18% to 28% range might depress demand by approximately 4%–6%

Jonathan Starks, CEO of freight forecaster FTR, summarized the situation bluntly: “Transportation has been exceptionally impacted and will continue to remain in flux until at least the end of the year.”

Volume lows and the tactical response from shippers and carriers

First-quarter freight volumes reached their lowest point for any calendar year, a condition that can favor transactional shippers hunting for marginal per-mile savings but is unwelcome for tens of thousands of dry-van operators who have endured nearly three years of recessionary conditions.

The industry's prevailing maxim—“Make your money when you can”—helped prompt moves such as J.B. Hunt’s decision to implement peak-season surcharges earlier in the year. That step was largely a reaction to global trade complications and the front-loading of shipments intended to avoid anticipated tariff increases.

Why market concentration remains low and driver labor pressures persist

Even the largest TL carriers control only a sliver of the overall market—barely 1% each—because truckload operations generally avoid heavy real-estate terminal networks and instead run direct Point A-to-B services. This structure keeps barriers to entry relatively low and tends to reward the lowest-cost operators.

In the non-union TL sector, the challenge of attracting and retaining qualified drivers continues to be a chronic issue, with direct consequences for capacity, cost structure, and overall operational performance.

Quarterly financial snapshots from major carriers

Performance has varied across large public TL companies.

• Knight-Swift, parent of the nation’s second-largest truckload carrier, reported $72.6 million in consolidated operating income for the second quarter, a 14.4% year-over-year increase. Knight’s truckload division led gains, while its newly formed less-than-truckload (LTL) unit posted a substantial decline versus Q2 2024 and the intermodal arm recorded a widening operating loss. As Knight CFO Andrew Hess said, “Overall, most segments experienced pressure on revenue year over year with a soft freight environment.”
• Heartland Express, ranked 13th among TL carriers, saw operating revenue fall 23% to $210 million in Q2 and reported an operating ratio (OR) of 106, signaling a difficult quarter.
• P.A.M. Transport’s trucking division reported an OR of 112.5 in Q2.
• Covenant Logistics Group reported relatively flat combined revenue across its expedited and dedicated TL segments; CEO David Parker observed, “We believe that general freight market fundamentals are slowly improving, although progress is uneven.”
• Landstar, the fifth-largest carrier, limited forward guidance entering Q3 because of economic uncertainty; its automotive segment declined about 17%, and management cited tariff effects and interest-rate sensitivity as contributors to a sluggish outlook.

Rail consolidation, intermodal dynamics and competitive pressure

A proposed $85 billion merger between Union Pacific and Norfolk Southern to create a transcontinental east-west rail network could shift freight away from trucks. Analysis from T.D. Cowen suggests the deal might redirect as much as $1 billion of truck freight to rail, especially shorter-haul volumes around the Mississippi River that are currently trucked.

Intermodal transport—trailers or containers moved on flatcars—has been one of the more profitable niches for TL operators for decades. Routing long-haul freight (typically over about 1,200 miles) onto rail can free drivers to focus on short- and medium-haul runs, easing the driver shortage pressure to some extent.

The UP/NS proposal could also trigger further strategic moves among railroads, such as a potential Burlington Northern Santa Fe interest in CSX, illustrating how many interlinked outcomes hinge on rail consolidation. As UP CEO Jim Vena put it this summer on an earnings call, “If you stand still, you get left behind.”

Industry fallout and shifting revenue strategies

Slackening demand has already contributed to bankruptcies and business closures among dry-van carriers in various regions, as the weakest operators have felt the impact most acutely. In response, truckload executives are exploring alternative revenue streams to keep volume growing while the broader market recovers.

One increasingly prominent strategy is to deepen partnerships with logistics firms and shippers across the U.S.-Mexico-Canada supply chain. Near-shoring of manufacturing to Mexico, coupled with new distribution centers and logistics hubs, could generate sustained truckload demand—particularly for cross-border services.

Cross-border investment trends and executive perspectives

Werner Enterprises CEO Derek Leathers has pointed to rising foreign direct investment (FDI) in Mexico as a potential upside for cross-border truckload volumes. According to Mexican government data, Mexico attracted more than $55 billion in FDI during the first half of the year, a record pace.

Leathers noted at the Deutsche Bank 2025 Transportation Conference that over $25 billion of that inflow—nearly half—came from the United States and Canada, highlighting the regional nature of manufacturing and logistics investment that could support future TL demand.

Outlook for shippers, rates and carrier earnings

Shippers need to track structural shifts in the truckload market and align operations to meet evolving service expectations. Analysts caution that sustaining rate increases will be difficult; most improvement in TL carrier earnings is expected to stem from internal efficiency gains rather than broad-based rate hikes to shippers.

Absent a clear change in trade policy or a rapid rebound in demand, the outlook into 2026 remains largely an extension of current conditions, with carriers adapting through incremental capacity additions, service diversification, and closer cross-border relationships.