January 26, 2026
After three challenging years of rate carnage and carrier exits, the 2025 holiday rush finally reminded the industry what a tight market feels like. But the more interesting story from the past month unfolded after packages arrived at their destinations. Returns season became a legitimate profit center for retailers who figured out the reverse-logistics game, and we break down how they did it. We’re also looking at LTL carriers holding firm on record rates despite softening demand, the DOL’s latest flip-flop on independent contractor classification (yes, again), and how tariff-fueled material costs are injecting uncertainty into 2026 planning. Plenty to dig into this month!
After three years of rock-bottom rates and carrier attrition, the trucking market gave small fleets and owner-operators something to celebrate during the 2025 peak retail season.
Tender rejections hit 13.24% during the holiday rush, blowing past the 7–8% threshold that typically signals a spot rate upturn. Spot rates climbed from $2.32 per mile on November 15 to $2.76 per mile by December 28 — an 18.9% jump that had carriers cheering. Winter storms pounding the Midwest and Northeast only amplified things, and the usual early-December lull between Thanksgiving and Christmas never materialized.
Forecasting 2026 remains tricky because demand signals continue to conflict. Tariff policies pulled imports forward before choking them off, and those high-profile White House investment announcements won’t translate into freight volume for years. Meanwhile, the American consumer keeps spending, accounting for over half of the 4.3% year-over-year GDP growth during Q3 2025. Mid-May could present the next stress test, with Roadcheck Week colliding with Memorial Day weekend. But for now, a prolonged market disruption seems unlikely.
Peak season success didn’t stop at the front door. The real action started when shoppers decided those jeans didn’t fit, and reverse logistics became the unlikely hero of holiday retail.
Consumers have mastered “buy now, decide later.” Ordering multiple sizes or colors (called “bracketing”) has pushed average return rates above 50%, with women’s dresses hitting a jaw-dropping 90%, according to IHL Group. The main culprits aren’t transit damage, despite what retailers often claim, but incorrect sizing (54%) and poor product quality (55%). That flood of returns created what experts call an “invisible value pool”: a $62.5 billion annual revenue opportunity sitting untapped when returned goods get tossed instead of resold.
The retailers winning this returns game stopped treating reverse logistics as a necessary evil. By co-locating fulfillment and returns operations, they can inspect, restock, and reshelve items the same day, recovering up to 90% of resale value. Dense networks of drop-off points also give shoppers the hybrid experience they crave: click to buy, walk to return. And labelless QR codes seal the deal, appealing to 32% of Gen Z shoppers who’d rather not hunt for a printer when dealing with a return.
LTL rates climbed to record territory in Q4, and carriers show zero interest in backing off. The TD Cowen/AFS Freight Index’s LTL rate-per-pound component landed 67.9% above its January 2018 baseline — up 100 basis points from Q3 and a whopping 490 bps year over year.
Carriers have mastered the art of holding the line. The rate index is expected to dip about 180 bps to 66.1% in Q1 due to seasonal softness, but that still marks a 220-bp year-over-year gain and nine consecutive quarters of annual growth. Even with limited demand and shippers hunting for savings through mode optimization, LTL operators continue refusing to buy freight volume with pricing concessions. Cost per shipment only fell 30 bps from Q3, even though weight per shipment dropped 160 bps and length of haul slid 260 bps. Fuel surcharges declined 140 bps, yet carriers still commanded premium prices.
The economy keeps throwing curveballs, but LTL operators keep swinging. December’s Purchasing Managers’ Index hit 47.9, down 30 bps from November and firmly in contraction mode for 10 straight months (and 36 of the past 38). The new orders index sat at a tepid 47.7, signaling no imminent rebound. Yet here’s the kicker: LTL cost per shipment has stayed over 40% above January 2018 levels since Q2 2022, even as weight per shipment has declined 20% over that span. Carriers learned hard lessons in previous downturns and aren’t repeating them, and we can expect to see it firsthand when LTL earnings season kicks off January 30 with ArcBest.
If you’ve been tracking the DOL’s independent contractor rules, you know the routine: new administration, new classification criteria. January 13 brought the latest twist when the White House Office of Management and Budget received a proposed rule update from the Department of Labor.
The 2021 rule zeroed in on two “core factors” to determine independent contractor status: the nature and degree of control a worker has over their work, and the worker’s opportunity for profit or loss based on initiative, investment, or both. Three additional “less probative” factors rounded out the analysis: skill requirements, the permanence of the working relationship, and whether the work fits into an integrated unit of production. The Biden administration delayed, then rescinded that rule entirely, replacing it with a “totality-of-the-circumstances” test that weighed multiple factors without prioritizing any single one. That version took effect in March 2024.
Trump’s DOL wasted little time after the 2025 return, ordering staff to stop enforcing the Biden-era rule and flagging potential rescission. Independent contractor regulations appeared on the agency’s Spring 2025 agenda, and a May opinion letter analyzing virtual marketplace service providers leaned heavily on "economic reality" language. Even though the formal proposal’s publication date remains unknown, the regulatory gears are already turning. Expect a revival of the earlier framework.
Construction input prices climbed 0.6% in November, and the culprit is no mystery. Tariffs have once again crashed the party, and this time they brought friends. Both overall and nonresidential construction input costs now sit 3.4% and 3.8% higher than a year ago, marking the sharpest annual increase since January 2023. Associated Builders and Contractors called it “plenty of cause for concern,” which feels like an understatement.
Aluminum mill shapes, slapped with a 50% tariff, skyrocketed 28% from November 2024 to November 2025. Steel mill products facing the same tariff climbed 4.6%. Fabricated structural metal bar joints and rebar jumped 16.6%. AGC Chief Economist Ken Simonson pointed out that construction input costs are outpacing what producers and consumers face elsewhere, largely because the industry bears the brunt of material tariffs. Meanwhile, contractors trying to pass these increases along have seen bid prices rise just 2.7% over the past year.
Uncertainty has become the industry’s unwanted roommate. AGC CEO Jeffrey Shoaf has warned that constant tariff announcements have spooked project owners, making them hesitant to commit. ABC Chief Economist Anirban Basu put it more bluntly: nobody can reliably predict how tariff costs will impact the supply chain, making 2026 input-price forecasting nearly impossible. Contractors and owners want stability and fewer price shocks. Instead, they’re left guessing — with real dollars at stake.
You can’t control tariffs, DOL rule swings, or what LTL carriers decide to charge next quarter. But you can control how reliably freight moves once it’s ready. That’s where the right delivery partner earns their keep.
FRAYT built a network of 45,000+ professional drivers across 150+ markets to remove uncertainty from the middle and last mile, delivering dependable service without the drama or premium pricing.
From the middle mile to the last mile, FRAYT will be with you every step of the way. Sign up now and turn supply-chain guesswork into something you can reply on.
