The latest ITS Logistics May Supply Chain Outlook reveals a striking dynamic in the freight and logistics sector—carrier exits have reached a 12-month high, while new operating authorities surged 48% month-over-month in April. This paradoxical pattern paints a picture of an industry in transition, reflecting both volatility and opportunity.

Market in Flux

April saw 8,200 carriers exit the market, the highest level in a year. This uptick in exits is largely attributed to ongoing cost pressures, soft demand, and compressed margins that have made it unsustainable for many small and mid-sized carriers to continue operations. The capacity correction, which began in 2023, appears to be far from over.

At the same time, a surprising 7,600 new carrier authorities were issued, representing a 48% increase from the previous month. This influx is likely driven by entrepreneurial optimism, lower fuel prices, and the cyclical nature of the industry which often draws in new players when barriers to entry are perceived as low.

What This Means for the Industry

The combination of high exits and high entries creates a highly fluid freight environment. According to ITS Logistics, this is indicative of “excessive market turnover”—a hallmark of economic uncertainty and shifting fundamentals.

Shippers and logistics providers are now faced with the challenge of maintaining reliable carrier relationships in a market where operators are coming and going at unprecedented rates. Stability in service, rate consistency, and risk management become even more critical in such conditions.

Regional Impact and Broader Trends

The report also notes that inbound volumes to the U.S. West Coast continue to increase, fueled by more stable labor dynamics at major ports and better-than-expected consumer demand. Inventory levels are normalizing, but the volatility in carrier activity suggests continued unpredictability in capacity availability.

Navigating the New Normal

For logistics professionals, the key takeaway is clear: adaptability is essential. Whether you’re a shipper looking to lock in reliable transportation or a carrier seeking to stay competitive, the current market demands flexible strategies and proactive planning.

ITS Logistics’ data-driven insights highlight how quickly the tides can turn in freight. Those with visibility, strong partnerships, and scalable systems will be best positioned to ride out the waves.

Source: ITS Logistics