US Freight Market Returns to Covid-Era Extremes as Capacity Tightens

The US freight market is showing signs of extreme tightening not seen since the peak of the Covid-era boom, according to the latest Logistics Managers’ Index (LMI).

March data revealed a sharp divergence between capacity and pricing. Transportation capacity fell deeper into contraction territory, while pricing surged to its fastest growth rate since March 2022. The gap between the two indicators reached its highest level since November 2021.

Part of the pressure is linked to the Iran conflict, which has driven fuel costs higher and added volatility to global logistics flows. At the same time, regulatory enforcement—including stricter licensing requirements and crackdowns on compliance—has further reduced available trucking capacity.

Pricing accelerated significantly in the second half of March, while capacity continued to decline. Smaller firms reported even higher pricing pressure than larger operators.

Despite these dynamics, inventory strategies remain cautious. Companies are maintaining leaner stock levels, shifting back toward just-in-time models rather than the just-in-case approach used during pandemic disruptions. However, rising inventory costs and limited buffers increase the risk of stockouts.

Looking ahead, logistics managers expect tight conditions to persist over the next 12 months, with continued pressure on capacity and elevated pricing levels.

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