Trucking Industry Facing ‘Horrible’ Rates, Tariffs, Werner CEO Says
At the WEX OTR Summit in San Antonio, Werner Enterprises Chairman and CEO Derek Leathers delivered a blunt assessment of the trucking sector’s health: freight rates are “stably horrible,” capacity is draining, and operating costs are rising across the board. He warned that unless rates change swiftly, the industry may struggle to remain viable while continuing to carry America’s goods.
Leathers said, “We’re at a tipping point. Capacity is leaving the market little by little. The industry needs significant rate increases to sustain itself. This isn’t just about survival — it’s about making sure trucking can continue to deliver America’s goods safely and reliably in the years ahead.”
What’s Fueling the Pressure on Trucking
Depressed Freight Rates
According to Leathers, the freight market has been operating under rate structures that fail to meet carriers’ cost bases. While rates may seem stable, they remain well below thresholds required to reinvest in operations or upgrade equipment. Many small carriers lack the margin to sustain operations under these conditions.
Capacity Contraction
Leathers expressed alarm that capacity is gradually exiting the market. Carriers that cannot absorb losses are choosing to exit the business. The result: reduced available trucks in critical lanes—further tightening supply and placing pressure on carriers that remain.
Tariffs and Equipment Costs
Tariff pressures are compounding the problem. Leathers noted that only part of the cost from new tariffs has reached end consumers—much is currently absorbed by suppliers and retailers. On top of that, tariffs on trucks manufactured in Mexico are threatening to drive up costs of new equipment at a time when many in the industry can least afford them. He observed that a large portion of trucks and parts are produced in Mexico and warned that trade protections under agreements like USMCA might not shield carriers from additional tariff burdens.
Driver Shortages and Compliance Risks
Leathers also spotlighted regulatory challenges, including renewed scrutiny of English language proficiency in CDL holders and more rigorous monitoring of cross-border drivers. These forces, combined with the ongoing driver shortage, make recruitment, retention, and compliance ever harder for carriers.
Cargo Theft Rising
Cargo theft is another serious threat. Leathers described the trend as “terrifying,” pointing to organized crime involvement and weaknesses in vetting. He urged shippers and carriers to adopt stronger verification and technology safeguards to protect freight. In his words, lapses in security or oversight could cost the industry dearly.
Broader Trends: Nearshoring, Trade, and Supply Chain Shifts
Leathers sees nearshoring—particularly growth in U.S.–Mexico trade—as a structural shift with lasting impact. Werner already hauls hundreds of cross-border loads daily, and he expects that volume to rise. Given Mexico’s favorable demographics and proximity, he views it as the key nearshoring alternative.
But he warned: growth won’t be frictionless. Trade policy uncertainty, tariffs, and infrastructure constraints may pose obstacles to scaling up cross-border operations smoothly.
What This Means for Fleets & Trucks
Rate resets are critical: If carriers can’t command rates above cost, many operations may shut down or consolidate.
Asset acquisition will be pricier: With Class 8 truck production low and tariffs raising costs, acquiring new equipment may be prohibitively expensive.
Risk management becomes essential: Fleets must redouble efforts on cargo security, compliance, and supply chain resilience.
Opportunities in cross-border lanes: Those positioned to serve growing U.S.–Mexico trade corridors may benefit—if they can adapt.
Survival may favor scale and agility: Large fleets with diverse lanes and deep capital may better absorb shocks than small operators.
For analysis on how these pressures affect your fleet risk, compliance planning, or insurance positioning, contact Allcom Insurance at 866‑277‑9049 or email info@allcomins.com