How to Understand the Freight Market: A Guide for Freight Brokers

Top Insights

Supply & Demand Drive Rates: When freight demand exceeds truck supply, rates rise; when trucks outnumber loads, rates fall.
Key Market Drivers: Truck capacity/driver availability, fuel and operating costs, infrastructure bottlenecks, weather events, regulations, consumer spending, e‑commerce, construction, seasonality, and global trade shape supply and demand.
Capacity Cycle Phases: The market rotates through equilibrium, tight (inflation), peak, loose (deflation), trough, and return-to-equilibrium over 2–3‑year cycles.
2025 Trends: Expect widespread AI/automation for routing and pricing, greener fleets (EVs and clean‑fuel mandates), booming last‑mile e‑commerce demand, expanded intermodal usage, and heavier spot‑market reliance.
Win-Through Relationships: Forge strong carrier partnerships with clear communication and on-time payment to secure capacity when markets tighten.
Stay Data‑Driven: Monitor live market data from sources like DAT, FreightWaves, Uber Freight, and BTS to quote competitively and react quickly to cycle shifts.
Cycle‑Specific Strategies: In tight markets lean on carrier networks; in loose markets emphasize cost savings for shippers—and always invest in training to sharpen your edge.

Starting a freight brokerage can feel like assembling a big puzzle with lots of pieces, especially for newcomers.

By understanding how the freight market works, you’ll be able to make smarter decisions, quote more confidently, and build lasting relationships. If you’re new to the transportation industry, this guide will give you all the essentials that’ll help you build a successful career.

Let’s explore the key concepts and strategies to set you on the path to success.

Understanding Supply and Demand in the Freight Market

The freight market operates on the economic principle of supply and demand.

Supply refers to the number of trucks and drivers available to move loads. This ranges from individual owner-operators to large fleets. When trucks outnumber loads, it means that supply is high.

Demand represents the loads that need to be moved, like fresh produce or manufacturing equipment. It comes from retailers, distributors, and other businesses that rely on trucks to move their goods. Demand is high when there are more loads than trucks on the road.

The balance between these two determines how much brokers and shippers will pay carriers.

How supply and demand affect rates

Here’s how the balance plays out in the marketplace:

High demand + low supply = higher rates. When there is more freight than trucks, brokers and shippers will have to pay higher prices.
Low demand + high supply = lower rates. With fewer goods than trucks, carriers will have to reduce prices to remain competitive and attract customers.

Understanding these principles can help you negotiate for better pay with carriers and shippers and set realistic expectations.

Key Factors That Affect the Freight Market

Supply and demand in the freight market are shaped by several important factors that brokers should watch closely.

Factors that affect supply include:

Truck capacity and driver availability. More trucks on the road increase supply and provide brokers with more options for filling truck orders. However, a shortage of qualified drivers limits how much freight can actually be moved.
Market conditions. Rising fuel, insurance, and maintenance costs can push smaller carriers out of the market. This puts more pressure on available trucks and drives up rates.
Infrastructure. Roads, ports, and bridges support efficient load movement. Bad roads, traffic, and port delays can increase delivery times and operational costs.
Weather events. Severe weather conditions (like hurricanes, snowstorms, or floods) can ground trucks, close roads, and delay shipments, reducing available capacity.
Government regulations. Rules like Hours of Service (HOS) limit how long drivers can operate. Licensing and safety requirements also restrict how many drivers are legally allowed to haul freight.

Factors that drive demand include:

Consumer spending patterns. During an economic boom, manufacturing increases and stores are restocked more frequently. Retailers ship more goods from suppliers to meet these rising customer purchases.
E-commerce growth. Online shopping has increased the need for fast, reliable freight services, especially for last-mile deliveries.
Construction activity. Building projects require regular shipments of equipment and resources like steel, wood, and concrete.
Seasonal trends. Holidays, harvest seasons, and back-to-school periods increase shipping demand in certain industries.
Global trade. International trade has a major impact on demand. Shifts in trade policies, tariffs, or the global economy can increase or reduce the need for freight services.

The Freight Market Capacity Cycle

The freight market moves in cycles typically lasting 10-12 quarters (about 2–3 years). These cycles shift through phases of balance (equilibrium), tight capacity (inflation), and excess capacity (deflation).

Here’s a simple breakdown of each phase:

Market Capacity Cycle	What Happens	Supply	Demand	Rates
Tight	Not enough trucks for all the loads	Low (fewer trucks)	High (more loads)	Rates increase
Balanced	Supply meets demand	Steady	Steady	Rates stabilize
Loose	More trucks than available loads	High (more trucks)	Low (fewer shipments)	Rates drop

1. Equilibrium

During this phase, supply and demand are relatively balanced. Rates are stable for spot and contract markets, and carriers can confidently plan their operations.

2. Tight/inflationary market

A tight market happens when demand exceeds supply. Shippers compete for limited truck capacity, pushing rates up. Tight markets often occur during peak seasons (like Q4), after economic rebounds, or during driver shortages.

During this phase:

Contract rates increase during annual procurement cycles.
Spot rates rise as shippers pay more to move their loads.
Carriers can be more selective about the loads they accept.

3. Peak

This phase happens when shipping demand is at its highest due to strong economic activity or seasonal spikes. During this time:

Spot rates shoot up because there’s more load than available trucks.
Contract rates also rise, but not as quickly as spot rates.

As rates climb, new carriers and trucks enter the market to take advantage of the higher prices. Gradually, this added capacity shifts the market toward oversupply.

4. Loose/deflationary market

This is when capacity exceeds demand. Rates begin to fall, and competition between carriers increases. Deflationary markets usually happen during slower economic periods or after a surge in new trucks entering the market.

During this period:

Spot rates decline first, followed by contract rates.
Carriers compete aggressively for loads, often taking lower-paying freight.
Shippers have more bargaining power and benefit from lower rates.
Brokers may see shrinking profit margins.

5. Trough/contraction

This is the bottom of the cycle. Rates are at their lowest, and too many trucks chase too few loads. Trucking companies face layoffs, closures, or consolidations as they struggle to stay profitable.

6. Return to equilibrium

Truck supply drops as unprofitable carriers leave the market or reduce their operations. Eventually, with fewer trucks and steady or rising demand, rates stabilize again. Over time, demand will outpace supply, starting a new cycle.

Understanding the current cycle in play can help you make informed decisions regardless of market conditions.

Freight Market Trends You Should Know in 2025

Here are the key freight market trends shaping the trucking industry:

Technology and automation

AI and machine learning are now essential in logistics. These tools help predict demand, optimize routes, and improve efficiency.

Digital load boards make it easier for brokers to find trucks and for carriers to secure loads. Automation is also streamlining logistics activities, helping companies like Amazon save billions.

Sustainability

New regulations, like California’s Advanced Clean Trucks rule, are pushing carriers to adopt greener practices. Electric and hydrogen-powered vehicles are becoming more common as the industry works to reduce carbon emissions and meet environmental targets.

E‑commerce growth

With the continued rise of online shopping, small and frequent shipments are becoming the norm. There’s growing demand for fast last-mile delivery, and distribution hubs are moving closer to urban centers to shorten delivery times.

Intermodal growth

Trucking companies are shifting to intermodal transport to cut costs and avoid delays. This happens when trucking is combined with rail, sea, or air, which provides faster or cheaper alternatives, especially for long-haul or international shipments.

As global shipping routes face disruptions and rail investments increase, intermodal is expected to grow even more in 2025.

Increased use of the spot market

With ongoing market volatility, shippers are relying more on spot market rates. Brokers who track rate changes, stay informed on market shifts, and move quickly will have an advantage.

How to Succeed as a Broker in the Freight Market

With a clear understanding of the freight market, you’re now ready to excel. Focus on these practical strategies to build a successful brokerage and navigate market challenges with ease:

Build strong relationships with carriers

Treat trucking companies with respect, pay on time, and communicate clearly. Strong relationships help you cover loads quickly. The better your network, the less likely you are to fall behind when capacity is tight.

Always stay informed

This industry moves fast. If you’re not watching the data, you’re guessing, which could make you lose money. Follow trusted sources like DAT, FreightWaves, Uber Freight, and the Bureau of Transportation Statistics to stay updated with current market conditions.

Adapt to different market cycles

Don’t fight the market; ride with it. In tight markets, lean on carrier relationships and move quickly. In loose markets, help shippers save money and stay competitive.

Invest in proper training

Programs like the 90-Day Freight Broker Course will teach you to quote loads, negotiate, and more. If you want to grow a sustainable business, proper training is something you can’t afford to skip.

FAQs

1. How much does it cost to start a freight brokerage?

Starting a freight brokerage involves several key expenses:

Getting your broker authority costs about $300 for the application fee.
A $75,000 surety bond costs between $900 and $9,000.
Annual insurance premiums for cargo and liability usually range from $1,500 to $3,000.
Setting up your office with equipment and software can cost between $1,000 and $5,000.
Freight broker training courses typically cost from $1000 to $3,000. However, the 90-Day Freight Broker Course is more affordable, at just $890.

In total, initial startup costs typically range from $10,000 to $20,000.

2. What are the common mistakes new freight brokers make in the market?

Common mistakes new brokers make include:

Lacking enough knowledge about the trucking industry.
Failing to build a professional network early.
Providing poor customer service.
Having slow billing processes.
Trying to handle everything alone.

Take measures to avoid these mistakes, as they can be costly.

Final Thoughts

Now that you know how the freight market works, it’s time to build on that knowledge. A great way to start is by joining our 90-Day Freight Broker Course. It’s designed to give you the insight, tools, and strategies you need to succeed in the marketplace, so sign up today!

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