A prolonged contraction in the movement of physical goods suggests the U.S. economy is in a goods recession, according to an analysis of freight data from FreightWaves. High-frequency data from the SONAR platform reveals that while consumer spending on services may be flat, the flow of goods vital to the manufacturing, retail and industrial sectors has stalled.
Read also: Leveraging shipping technology for smarter global business operations
A turbulent journey: freight markets since 2018
The freight market showed signs of stress beginning in 2018. By 2019, the industry entered a “trucking bloodbath” recession characterized by excess capacity and falling prices that wiped out many small carriers. The COVID-19 pandemic in 2020 initially caused a supply chain freeze, but a boom driven by stimulus checks, a rise in e-commerce, and inventory restocks followed, pushing the Outbound Bid Volume Index (OTVI.USA) to record levels in 2021-2022. During this period, employment of truck drivers rose to more than 1.6 million.
Beginning in March 2022, the “Great Freight Recession” began as inflation rose and consumer spending shifted back to services, causing freight volumes to decline sharply. The OTVI index fell, reaching its lowest level in 2023, while driver employment began to gradually decline. A potential rebound emerged in the second half of 2024, with OTVI beginning to outpace truck driver employment, suggesting the market was moving toward equilibrium.
Drowning 2025: Killing the Recovery
The recovery did not last long, as 2025 witnessed a sharp decline. Freight demand, as measured by OTVI, has fallen to levels not seen since the height of the pandemic, currently standing at around 9,420, an 18% decline year-on-year. At the same time, employment of truck drivers has returned to pre-pandemic levels, about 1.523 million, indicating ongoing adjustments but also persistent overcapacity in the industry.
Source: Market intelligence platform IndexBox
