There’s been no shortage of commentary lately about the impacts of tariffs on U.S. manufacturing in light of the new Trump tariff plan. As expected, the “experts” don’t all see eye-to-eye, so I won’t spend much time debating the policy itself. Instead, I’m starting from a simple assumption: increases in import tariffs will result in one MAIN objective – bringing manufacturing back to the U.S. If we can agree on that premise (and with over $5 trillion in new investments recently reported, there’s reason to believe it) then we can begin a straightforward discussion about what this shift means for domestic freight transportation across all modes.
Domestic supply chains typically rely on ground transportation, with limited use of air. If we assume that imports will decline, due to a combination of renewed onshore production and restricted offshore production driven by tariffs, we can immediately expect three outcomes:
- Reduced port traffic
- Fewer loads for drayage carriers
- Increased shipping capacity, which may drive rates downward
That said, the goal of this analysis is to explore how these shifts could affect domestic transportation costs over the next 12 months, with a primary focus on truckload and LTL freight.
Key Cost Drivers
Contrary to popular belief, trucking is a low-margin, highly regulated, and intensely competitive industry. Carriers face constant challenges: a persistent shortage of drivers, rising insurance premiums, deteriorating infrastructure that damages equipment, and unpredictable access to new trucks and trailers. Despite all of this, they continue to battle for freight. Why? Because in trucking, volume is everything. Profit is made by maximizing every mile traveled. When demand is high (more freight than trucks), rates climb. When demand drops (more trucks than freight), rates fall accordingly.
Driver Shortage
The driver shortage remains the most significant constraint on a carrier’s ability to grow. For large fleets, unseated trucks are a key performance metric. Because without drivers, trucks don’t move. To attract and retain top-tier drivers, carriers must offer competitive wages, strong benefits, more home time, and clean, safe, modern equipment.
Over the past 30 years, the regulatory burden for entering the profession has grown substantially, discouraging many potential drivers. With fewer people entering the field, wages have risen in an effort to fill the gap, and those higher labor costs ultimately get passed along the supply chain.
Insurance
Ask any trucking CFO, and they’ll confirm: insurance is one of their most complex and costly challenges. Premiums are influenced by many factors, including reinsurance rates and industry-wide claims performance, many of which are outside a carrier’s control.
Carriers with strong safety and maintenance programs usually see better rates, but maintaining those high standards comes at a cost, too. Once a carrier reaches a certain scale and can self-insure, they gain more control over these expenses. But until then, insurance remains a volatile cost driver.
Fleet
A carrier’s growth is tied directly to its ability to expand its fleet: trucks and trailers. This can happen through acquisitions or by purchasing new or used equipment. While acquiring another carrier increases capacity for that specific company, it doesn’t add new capacity to the overall market.
On the other hand, adding new trucks requires capital. With slower truck sales, manufacturers have cut back production, creating delays for those trying to scale. So, even when the desire and resources exist to expand, equipment availability can be a bottleneck.
Fuel
You might be wondering why fuel comes last on this list. While it’s a critical factor in supply chain costs, it’s not a direct expense for most carriers. That’s because fuel costs are typically passed along to shippers through a fuel surcharge (FSC).
Still, fuel prices (particularly diesel) remain an important part of the broader conversation around cost drivers in domestic logistics. Even if the burden doesn’t fall squarely on the carrier, fluctuating fuel prices ripple throughout the supply chain.
How Will Increases in Domestic Manufacturing Impact Supply Chain Costs?
As U.S. manufacturing ramps up in response moving production back onshore, domestic supply chains will see a corresponding surge in freight demand. This increased demand will initially outpace available trucking capacity, prompting carriers to raise rates quickly. Truckload pricing tends to be highly responsive to market shifts, so the rate hikes could come fast and sharp.
Whether those rates stabilize, or continue climbing, will largely depend on the strength of relationships between shippers, carriers, and brokers. Strategic partnerships can help mitigate volatility during this transition. However, if the supply-demand imbalance persists or grows, carriers will look to expand capacity by adding more trucks to their fleets.
The timeline for increasing capacity depends on how quickly manufacturers ramp up and whether carriers have access to capital and equipment. If funding is available and new equipment can be sourced, fleets will grow. But if high interest rates persist and new equipment remains delayed, the used truck market will likely fill the gap until production catches up.
What Should Shippers and Carriers Expect?
Initially, shippers should prepare for higher carrier rates as surplus capacity is absorbed. As pricing increases, more carriers, and new entrants, will be incentivized to add trucks and expand their services. Over time, as supply catches up to demand, rates will begin to normalize.
One important reminder: rates typically rise faster than they fall. Even after capacity increases, it may take time before shippers feel meaningful relief on pricing.
How Long Will This Shift Take?
The short answer: it depends—on the pace of manufacturing growth and how quickly the carrier base can respond. Carriers tend to react fast, particularly in spot markets where rate negotiations happen daily. Those operating under contract may adjust more slowly, but all will respond to a meaningful increase in volume.
A critical wildcard is the availability of drivers. Historically, driver availability has been closely tied to non-farm wage growth. If factory wages rise rapidly to meet labor demand, carriers may struggle to recruit drivers. Conversely, if wage growth in manufacturing is moderate, carriers may find it easier to fill seats and scale operations accordingly.
Our Outlook for 2025
We anticipate flat to slightly rising truckload rates through Q2 and into Q3. As additional capacity enters the market, rates should begin to ease by late Q3, with stabilization expected by year’s end.
Lower diesel prices throughout 2025 will also help reduce total shipping costs, offsetting modest increases in linehaul rates. As capacity grows and fuel costs remain low, the overall cost of domestic freight movement should trend downward heading into 2026.
At TOP Worldwide, we understand how shifts in U.S. tariffs and domestic manufacturing can ripple through the entire supply chain. Our nationwide carrier network, real-time visibility tools, and flexible capacity solutions ensure that your freight keeps moving…no matter how the market evolves. Whether you’re a shipper or carrier, we’re here to help you navigate rate changes, mitigate risk, and deliver results with speed and precision. Let’s tackle the road ahead, together. Contact your TOP representative today.
Jeff Berlin
is the Chief Operating Officer of E.L. Hollingsworth & Co. and serves as the Senior Operations Executive for TOP Worldwide and Native American Logistics. With over 30 years of experience leading logistics and trucking companies, he brings deep industry expertise to his role. Jeff is also a CDL-A driver and a private pilot. Contact Jeff at jberlin@elhc.net.