North American cross-border trucking capacity is expected to remain constrained into 2027 despite softer freight demand.
Executives at logistics provider TRAFFIX told FreightWaves driver shortages, regulatory restrictions and rising operating costs could limit the number of trucks available to haul goods between the U.S., Mexico and Canada.
The challenges are being compounded by higher interest rates and tighter lending conditions that are discouraging new trucking companies from entering the market, preventing the kind of capacity expansion that followed the freight rate surge during the COVID-19 pandemic.
“We’re only four or five years later and we’re not seeing that,” Alex Fuller, vice president of commercial intelligence at TRAFFIX, told FreightWaves in an interview. “And it’s like, OK, well, what’s different?”
Fuller said two factors stand out: tighter regulations governing who can operate commercial trucks and the increased cost of purchasing equipment.
During the pandemic, prospective owner-operators could finance trucks with relatively inexpensive loans and government stimulus funds. Today, Fuller said, financing costs can reach 8% to 9%, making it much more difficult for drivers to enter the industry or established carriers to expand their fleets.
“Because of that, yeah, rates are going to stay higher for longer,” Fuller said. “And we’re not going to see the immediate drop like we saw a couple of years ago in rates.”
The comments follow the release of TRAFFIX’s October North American Cross-Border Index, which measures freight market pressures along the U.S.-Mexico and U.S.-Canada corridors.
The index registered 57 for Canada and 54 for Mexico, down one point each from September. Readings above 50 indicate tighter market conditions, including elevated costs, limited truck capacity and regulatory challenges.
Although shipment volumes remain relatively soft, TRAFFIX said available truck capacity has shown little improvement, leaving shippers with fewer alternatives when contracted carriers are unable to cover loads.
The index tracks four components — transportation costs, capacity, demand and trade policy — using more than 10 economic, freight and trade indicators.
Fuller said the index relies primarily on publicly available government and trade data, which TRAFFIX compares with its internal freight activity to assess whether the findings reflect conditions experienced by its customers and carriers.
As of Oct. 11, FreightWaves SONAR’s Outbound Tender Volume Index (STVI.LRD) for Laredo has climbed sharply from 39.95 in mid-September to 51.95, indicating a solid uptick in cross-border freight demand. This demand push is reflected in the SONAR Weighted Rejection Index (SWRI), which flipped from -0.74 last week to +0.65, confirming that capacity in Laredo and its adjacent areas is actively tightening.
Mexico faces driver shortages, visa restrictions
Patricio Gutierrez, TRAFFIX’s Manzanillo, Mexico-based carrier sales manager, said the country’s cross-border trucking industry is confronting a combination of driver shortages, U.S. immigration restrictions and structural bottlenecks at border crossings.
“I think that the main issue here is a lack of qualified drivers,” Gutierrez said, pointing to Mexican drivers holding valid B-1 visas and the limited number of trucks authorized to operate in the United States.
He said cross-border operations require drivers and equipment that meet specific regulatory requirements, reducing the number of carriers able to handle international shipments.
Border delays and longer transit times further restrict usable capacity by keeping trucks occupied longer, even when overall shipment demand remains relatively stable.
Gutierrez also highlighted Mexico’s longstanding difficulties recruiting younger truck drivers.
He said many drivers are in their 50s and 60s, while younger workers are reluctant to enter the profession because of security concerns and relatively low compensation.
“The shortage of drivers in Mexico is a real problem,” Gutierrez said.
The capacity constraints are especially important at major commercial gateways such as Laredo, Texas, where large concentrations of cross-border freight make certain routes particularly sensitive to equipment and driver availability.
A separate October freight market report from C.H. Robinson supports concerns about Mexico’s shrinking pool of qualified cross-border drivers.
The company’s Edge Report said U.S. authorities have withdrawn visas from approximately 25,000 Mexican freight drivers, citing Mexican trucking association CANACAR.
C.H. Robinson said continued B-1 visa withdrawals and temporary border disruptions reduced usable truck capacity during September, even as load-to-truck ratios and freight volumes remained relatively stable at major Texas crossings.
The report also highlighted restrictions on southbound empty-truck crossings at Eagle Pass and Brownsville, Texas, from Sept. 9-14.
During the disruptions, daily commercial crossings reportedly fell from approximately 1,000 to between 300 and 400, while nearly 700 tractors were stranded on the U.S. side of the border.
Some carriers were forced to reposition equipment through Laredo, adding mileage, fuel costs and transit time.
C.H. Robinson warned that qualified driver availability could tighten further as fourth-quarter shipping volumes increase.
Canada carriers struggle with imbalanced freight flows
On the U.S.-Canada border, TRAFFIX executives said trade tensions and changing freight patterns are creating a different set of challenges.
Lance Halliday, TRAFFIX’s Toronto-based regional director of carrier sales, said trucking companies are struggling with an imbalance between freight moving from Canada into the United States and shipments returning north.
He said demand for Canadian exports remains relatively strong, but weaker south-to-north freight flows make it difficult for drivers to find return loads.
“There’s still a severe lack of inbound,” Halliday said. “So there’s not a lot of freight coming in from the U.S. into Canada right now.”
That imbalance has made some carriers unwilling to accept shipments into certain U.S. markets without significantly higher compensation.
Halliday singled out Florida as an especially challenging destination because drivers may have to wait days for a return shipment or travel hundreds of miles empty to find another load.
“Florida is a no-go zone,” Halliday said. “Guys just won’t go because they’re getting stuck down there for days.”
He said carriers are also increasingly reluctant to accept freight into markets where the cost of returning empty equipment could eliminate profits.
The imbalance is contributing to rising transportation rates, particularly on lanes where shippers have limited carrier alternatives.
Halliday said rates on some corridors have climbed 25% to 35% over roughly the past month to month and a half, although he did not identify specific lanes or provide a marketwide average.
Contract freight shifts toward spot market
TRAFFIX executives also described a growing shift toward transactional freight as carriers reject previously negotiated contract rates.
Halliday said some carriers are returning freight commitments because rates established months earlier no longer cover their operating costs.
That has forced shipments farther down shippers’ carrier-selection lists, increasing reliance on spot-market transportation.
“We’re seeing a lot of that contractual freight handed back by their primary carriers,” Halliday said.
He said the volume of transactional freight opportunities TRAFFIX is seeing on the Canadian side has surpassed levels experienced during the COVID-19 freight market, based on his observations of the company’s operations.
Gutierrez said similar conditions are emerging in Mexico, where rising diesel costs and capacity restrictions are pushing carriers to seek higher rates.
He said some Mexican shippers remain reluctant to accept higher transportation costs, creating tension between carriers trying to maintain profitability and customers accustomed to lower contract pricing.
Both executives said the situation reflects broader structural challenges rather than a temporary increase in diesel prices.
Halliday pointed to higher driver wages, insurance expenses and reduced access to financing as additional pressures preventing carriers from expanding.
Capacity constraints could extend into 2027
Looking ahead, TRAFFIX executives said they expect cross-border truck capacity to remain tight through the end of 2026 and into next year.
Halliday said he does not expect significant relief over the next three to six months, citing continuing driver shortages, trade uncertainty and seasonal capacity reductions.
“I think that in the short term, it’s going to continue to tighten up,” Halliday said. “I don’t think that there’s any way that this changes over the next three to six months.”
Gutierrez said Mexico faces similar longer-term challenges unless the industry finds ways to recruit drivers and improve cross-border operating efficiency.
Fuller said the lack of new capacity entering the market could keep freight rates elevated even without a substantial recovery in demand.
Unlike the pandemic-era trucking boom, when high rates encouraged new carriers to purchase equipment and enter the industry, today’s financing environment is discouraging that response.
Why it matters: Shippers face the prospect of elevated freight rates and fewer carrier options even as shipment demand remains relatively soft, TRAFFIX executives say.
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