Unlock stock picks and a broker-level newsfeed that powers Wall Street.
Why Trucking is Bullish on a Trump Return
Glenn Taylor
4 min read
A return to the White House for President-elect Donald Trump carries plenty of uncertainty about the U.S.’s future role in global trade. But a new Trump administration’s anticipated protectionist push for more domestic manufacturing and nearshoring, as well as a focus on energy independence, could lend itself well to the U.S. trucking industry—one that has been hit hard by a two-year freight recession.
Top trucking stocks skyrocketed in the hours after the election was officially called Wednesday morning. By market close, Old Dominion (11 percent), XPO (10 percent), ArcBest (16 percent), Saia (13 percent), Werner Enterprises (8 percent) and TFI International (10 percent) all saw massive positive swings to their share price.
Trump’s plans for a 10 to 20 percent tariff on all imported goods and a 60 to 100 percent tariff on all Chinese imports are not set in stone. But such an expansion of the duties appears to be designed to push businesses to pivot to more local manufacturing instead of outsourcing it to China—whether that be in warehouses in the U.S. or in Mexico.
The rounds of tariffs Trump levied in his first term, as well as those maintained by the Biden administration, have in part helped usher in more trade with Mexico. According to a Moody’s report released in April, the proportion of U.S. imports from China fell from almost 19 percent at the start of 2022 to only 13.5 percent at the end of 2023. Meanwhile, imports from Mexico increased from 13.5 percent to roughly 16 percent in the same time frame, making Mexico the No. 1 exporter of products to the U.S. market.
Mexico’s status as the top trade partner has helped fuel more freight movement across the border. Year-to-date, U.S.-Mexico cross-border truck traffic rose by roughly 52 percent through September, according to Motive, which tracks trucking visits to North American distribution facilities for 50 major retailers. In September alone, cross-border truck visits went up 30 percent from the 2023 month, representing the highest weekly totals since the metric was tracked in 2021.
In theory, if companies have more incentive to keep production operations close to home, whether in the U.S. or Mexico, trucking companies would be moving more freight volumes domestically—a bullish sign that freight rates on the road will finally kick back up.
Dry van spot rates as of Oct. 13 were $1.65 per mile, up 7 percent from $1.54 in the year prior, but still 39 percent down from a peak of $2.70 per mile on Jan. 9, 2022, according to data from DAT Freight & Analytics.
Policies aside, there is hope that the trucking industry turns around, as industrywide declines in spending and freight shipments decelerate from quarters’ past.
According to the latest U.S. Bank Freight Payment Index released on Sept. 31, shipments were down 1.9 percent compared to the previous quarter while spending dropped 1.4 percent. While this was the ninth consecutive quarterly decrease in volume, it was the smallest drop in more than a year.
Bobby Holland, U.S. Bank’s director of freight business analytics, said in a statement that even though volume and spend contractions have lessened, “we’re waiting for clear evidence that the market has reached the bottom.”
Vice President-elect JD Vance has already brought a sense of optimism to the trucking industry, co-sponsoring two bills that many drivers are hoping Congress will pass in the coming years.
One such legislation, The Truck Parking Improvement Act, would authorize $755 million in competitive grant funding to expand commercial truck parking capacity across the country. Another law in limbo, the DRIVE Act, would prevent the Federal Motor Carrier Safety Administration from requiring large trucks to be equipped with a speed-limiting device. Truckers argue that those devices create unnecessary congestion and result in higher crash rates.
Multiple trucking groups praised the Trump-Vance ticket in statements Wednesday morning, congratulating them on the election victory.
Todd Spencer, the president of the 150,000 member Owner-Operator Independent Drivers Association, highlighted the two bills co-sponsored by Vance. Spencer said the firm was looking forward to working with the Trump administration to “advance a pro-trucker agenda, which includes expanding truck parking, stopping unworkable environmental mandates, and preventing a dangerous speed limiter mandate.”
American Trucking Associations (ATA) president and CEO Chris Spear said Trump’s “second term offers an historic opportunity to build upon that record and show why the best approach to governing is one paved by common sense.”
In its statement, Spear reiterated the ATA’s hope to repeal a century-old excise tax on heavy-duty trucks, which trucking and transportation organizations argue hampers them from investing in cleaner, safer trucks and equipment.
He also called for replacing some of the Environmental Protection Agency’s electric vehicle mandates with “national emission standards that are technologically achievable and account for the operational realities of our essential industry.”
