Shipping & Freight News

When temperatures plunge or major storms hit, supply chains feel it immediately. In extreme cold, heated van capacity becomes scarce. That shortage shifts pressure onto refrigerated equipment, tightening an already specialized segment of the market. And when weather disasters strike, food and other temperature-sensitive goods become the top priority. The urgency is immediate, and the transportation network must respond in real time.

Refrigerated freight has long been one of the most challenging sectors to staff and operate. It often requires longer hauls, unpredictable wait times, strict temperature compliance, and deliveries into congested urban or disaster-impacted areas. When severe weather increases the likelihood of delays or extended time on the road, the difficulty compounds. These operational realities directly affect capacity availability and rate volatility.

Despite headlines about downturns, freight volumes have not collapsed in the way many expected. Instead, the industry has been navigating what is more accurately described as a rate recession. Freight continues to move, but pricing has remained suppressed for an extended period.

This distinction matters. During the pandemic-era surge, elevated rates encouraged a wave of new carrier entrants, particularly small fleets and owner-operators operating one to three trucks. Many invested in equipment at historically inflated prices. As rates declined, those same operators were forced to compete in a drastically different cost environment, often without the margin cushion they once enjoyed.

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“We saw going into COVID a huge surge in the number of carriers, because the rates started going up and everybody goes, ‘Oh my god, I can make money here,’” says FTR Transportation Intelligence Chairman Eric Starks. “We saw a huge surge in the amount of capacity…but in recent years, we’ve seen that start to contract quite a bit.”

Surprisingly, total carrier counts have not contracted as sharply as some analysts predicted. While there has been some attrition, the overall population remains relatively high. That persistence has kept capacity looser than expected, even as operating costs remain elevated.

One of the most significant cost pressures has been insurance. Premiums rose sharply over the past several years, driven in part by increased claims severity, litigation trends, and heightened fraud and cargo theft across the industry. For smaller carriers in particular, these higher fixed costs present a structural challenge.

Although insurance premiums have begun to level off, they remain far above historical norms. For traditional small carriers operating on compressed margins, sustaining operations under these conditions is difficult. When combined with equipment replacement deferrals and a tightening driver pool, the industry may be closer to equilibrium than it appears at first glance.

“We have seen huge amounts of increases in insurance premium costs, and that’s really not sustainable,” Stark warns.

For the market to stabilize in a durable way, recovery must be freight-driven. Short-term rate spikes caused by isolated weather events or capacity dislocations are not sustainable on their own. True normalization requires growth in underlying freight demand, particularly from manufacturing and broader economic expansion.

Carriers naturally prefer tighter capacity conditions that support rate growth. Shippers, after several years of declining or flat pricing, may be inclined to expect continued softness. However, budgeting for flat rates indefinitely can create long-term supply chain risk.

At minimum, inflationary adjustments should be factored into transportation budgets. Even a modest 2 to 3 percent annual increase represents a baseline expectation in a normalizing market. More forward-looking shippers are preparing for higher increases in specific segments, particularly refrigerated freight, where capacity constraints can materialize quickly.

Driving rates downward without regard for carrier sustainability risks eroding the very supply base that ensures service reliability. Once capacity exits the market, rebuilding it is neither immediate nor inexpensive.

Current contract rate growth remains muted, with modest year-over-year increases. Broader projections suggest gradual movement rather than dramatic spikes in the near term. However, prolonged stagnation increases the probability of a sharper correction later, especially if freight demand rebounds while capacity has been quietly constrained by underinvestment.

This is why scenario planning matters. Organizations should model not only a base case of incremental increases, but also stress-test their networks against tighter capacity and accelerated rate growth. A 3 to 5 percent planning assumption may be reasonable for long-term forecasting, but it is insufficient as the sole contingency plan.

At Triple T Transport, we help our partners navigate these complexities with data-driven insight and practical planning. Whether preparing for seasonal volatility, evaluating capacity strategies, or modeling what-if scenarios, proactive collaboration is the difference between reacting to disruption and staying ahead of it. If you are reassessing your transportation strategy for the months and years ahead, our team is ready to build a plan that balances cost control with resilience. Contact us today to learn more.