Freight Market Outlook: Regulatory Enforcement to Prolong Supply-Driven Cycle
Thom Albrecht, Chief Revenue Officer of Reliance Partners, discusses the current freight market outlook, citing regulatory enforcement as a key factor in prolonging the supply-driven cycle.
The trucking freight cycle is being driven primarily by supply constraints rather than demand, according to Thom Albrecht, Chief Revenue Officer of Reliance Partners. Albrecht believes that the cycle could last beyond the end of next year or into the first quarter of 2028 if regulatory enforcement stalls, and could extend significantly longer if pending rules are enacted.
Supply-Side Developments
Albrecht identified five supply-side developments that have already reshaped carrier capacity: English language proficiency enforcement, action on non-domiciled drivers, elimination of self-certification at CDL institutions, the move away from self-certification for electronic logging devices, and legal fallout from the Montgomery Supreme Court decision. These developments have contributed to a tightening of capacity in the trucking industry.
Demand Picture
While demand is not robust, it has improved, with the Purchasing Managers Index survey showing an increase in industries reporting growth from 4 out of 18 in September of last year to 15 out of 18 in July. Albrecht also tracks chemicals and scrap metal as proxies for future industrial activity, and both commodity flows point toward gradual improvement in the manufacturing economy.
Regulatory Enforcement
A centerpiece of Albrecht's outlook is the planned elimination of ELD self-certification, which he believes will consolidate the U.S. market from roughly 1,000 registered devices to 20 or fewer certified providers. He also advocates for stiffer fines on both drivers and motor carriers for English language proficiency violations, and suggests that freight itself could be seized by the government as an enforcement tool. The following table summarizes the potential impact of regulatory enforcement on the trucking industry:
| Category | Current | Proposed |
|---|---|---|
| ELD registered devices | 1,000 | 20 or fewer |
| DOT number cost | $300 | $5,000 - $10,000 |
| New entrant reform | None | 100+ questions covering maintenance, hours of service, and driver skills |
The broader demand picture offers some support for carriers, with rail freight data showing the freight index reaching its second-highest level since 2008. Albrecht predicts a bumper corn crop this year, driven by heavy rainfall across the Midwest and Southeast, which would add to already strong grain export shipments moving by rail. However, he is skeptical that large shippers could lobby Washington to ease carrier regulations and relieve tightening capacity, citing the current administration's focus on safety and immigration compliance.
