Susquehanna states that TL recovery needs a boost from increased demand

Analysts Grow Optimistic About Truckload Market Recovery

Industry experts are showing greater confidence in a rebound for the truckload sector, largely due to stricter regulations that are reducing available capacity. Despite this, many believe that a true and lasting recovery will only happen if there is a significant uptick in demand.

Bascome Majors, an equity research analyst at Susquehanna Financial Group, noted in his 2026 outlook that, “After more than three years of a freight recession following the pandemic, we’re finally witnessing early indications of a notable improvement in the balance between truckload supply and demand, and the market is responding accordingly.”

Majors highlighted an unusually strong seasonal rise in spot rates at the end of the year, but pointed out that demand patterns remain typical for this stage of the cycle.

Since the week before Thanksgiving, shares of Knight-Swift Transportation (NYSE: KNX), Schneider National (NYSE: SNDR), and Werner Enterprises (NASDAQ: WERN) have surged by nearly 40% on average, coinciding with a sharp increase in both tender rejections and spot rates. In comparison, the S&P 500 rose just 6% during the same period.

Strong demand during the peak season, combined with harsh winter weather, contributed to a tighter market. Additionally, stricter driver regulations—including language proficiency standards, restrictions on non-resident CDL holders, and tougher enforcement of ELD and driver training requirements—are further limiting capacity.

SONAR: Van Outbound Rejection Index (VOTRI.USA) for 2026 (blue), 2025 (yellow), and 2024 (green). This index, which tracks the percentage of dry van loads rejected by carriers, serves as a measure of truck capacity. The current data points to a tightening market.

SONAR: National Truckload Index (linehaul only – NTIL.USA) for 2026 (blue), 2025 (yellow), and 2024 (green). This index reflects the average spot linehaul rates for dry van loads across 250,000 lanes, using a seven-day moving average and excluding fuel. Spot rates climbed during the peak season as new driver restrictions took effect.

Majors described the supply situation as favorable heading into 2026, referencing recent data from the Logistics Managers’ Index, which reported the steepest drop in transportation capacity in four years and a record reduction in inventories. He also anticipates that Class 8 tractor fleets will shrink this year and possibly next, given that new builds are not keeping pace with replacements.

However, Majors cautioned that broader uncertainties—such as tariffs, geopolitical issues, employment, and inflation—continue to weigh on the market, especially as carriers enter the slowest quarter of the year.

“To clarify, we see the supply side as setting the stage for a truckload recovery, but it’s demand that truly drives up rates, margins, and earnings. This pattern was evident during the 2017/18 upcycle, which was fueled by ELD regulations and serves as a useful comparison to today’s environment,” Majors explained.

J.B. Hunt Receives Upgrade; Truckload Projections Lowered

Susquehanna has upgraded J.B. Hunt Transport Services (NASDAQ: JBHT) to a “positive” rating, matching the outlook already held for Hub Group (NASDAQ: HUBG). Improved rail service and highly engaged rail partners, following the merger announcement between Norfolk Southern (NYSE: NSC) and Union Pacific (NYSE: UNP), are expected to provide a boost in volume for intermodal operators. If the truckload spot market maintains its recent rate gains, a shift to intermodal could become more attractive.

Additional Developments for J.B. Hunt

J.B. Hunt is currently implementing a $100 million cost reduction plan, with management indicating that their internal targets are even more ambitious. An environment of rising truckload rates is expected to benefit all of the company’s divisions except for final-mile delivery.

“Overall, we view JBHT as a strong option for investors looking to benefit from the emerging truckload upcycle, even though the near-term outlook is less dependent on continued spot rate momentum during what is typically a softer season,” the report stated.

Majors increased his 2026 full-year earnings-per-share projection for J.B. Hunt by 1%, making it the only truckload-related company he covers with estimates above consensus (by 2%).

He maintained a neutral stance on other truckload stocks, describing the sector as a more direct play on rate trends and margin recovery. Majors reduced his 2026 truckload estimates by 9% to 20%, placing them 13% to 27% below consensus. Fourth-quarter 2025 estimates were also trimmed, but to a lesser extent.

Most truckload carriers are anticipating mid-single-digit increases in contract rates during the 2026 bid season.

“Our 2026 forecast revisions reflect the reality that freight demand hasn’t yet picked up as we enter the new year. We remain cautious about the first half of 2026 and have adjusted our estimates accordingly,” Majors said. He did note, however, that “there are clear signs that the supply and demand balance in truckload is shifting, giving carriers more pricing power.”

“While we have reservations about the pace of change for some of the most impacted companies, we can’t ignore the most promising signs of a significant market shift since 2020,” he added.

J.B. Hunt is set to kick off the fourth-quarter earnings season on January 15, reporting after the market closes.