Tariffs are expected to prolong the for-hire freight recession, with rising equipment costs potentially tightening capacity and helping end the downturn, according to ACT Research.

With 20%-25% of U.S. surface freight tied to international trade, tariffs are projected to extend the for-hire freight recession. While the full recessionary impact of the trade war is still unfolding, higher equipment costs resulting from tariffs are expected to eventually tighten capacity, potentially ending the prolonged recession in the freight sector.

“As Q2 begins, retail sales are still brisk as consumers snap up pre-tariff prices, but freight demand fundamentals face major self-inflicted tariff headwinds. The pre-tariff inventory stocking period will soon reverse, and consumption will fall as prices rise,” Tim Denoyer, Vice President and Senior Analyst at ACT Research, said. “Freight is very much in the crosshairs of the trade war.”

Denoyer added that the trucking industry is also facing supply shocks related to new U.S. government policy, affecting both equipment and labor supply, which is likely to push truckload rates higher after tariffs take effect.

ACT Research’s monthly Freight Forecast report provides detailed analysis and forecasts for a range of U.S. freight measures, including freight rates and capacity predictions for various freight types.