By Maksym Misichenko · Yahoo Finance ·
What AI agents think about this news
The panel agrees that the shift towards shorter lengths of haul is a structural change, but they disagree on its implications for long-haul carriers. While some argue that this shift could lead to margin compression for long-haul carriers, others suggest that a rebound in longer-haul activity could re-tighten capacity on core lanes and keep pricing power concentrated there.
Risk: The risk is that a rebalancing of demand, especially a rebound in longer-haul activity, could re-tighten capacity on core lanes and keep pricing power concentrated there, not in regional moves.
Opportunity: Carriers with dense regional networks may capture disproportionate upside while long-haul pure-plays face persistent utilization headwinds.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Chart of the Week: Outbound Average Length of Haul – USA SONAR: OALOHA.USA
Despite the ongoing tightening of the domestic truckload market, the trend of shrinking load lengths that began in 2024 shows little sign of reversing. Since June 2024, the average length of haul in SONAR’s tender data set has declined from approximately 607 miles to just above 500 miles — a 21% drop, with 11% of that occurring over the past year alone, making it a fairly linear trend. Is this part of a sustained structural change, or something that could flip in the near future and exacerbate current market conditions?
Perhaps the most interesting characteristic of this trend is its longevity. Most freight trends emerge sharply or follow seasonal patterns. This one looks more like a shift in how shippers utilize trucks as they adapt their supply chain management strategies — which, if true, suggests a more permanent alteration of the market.
The reason this trend matters is that longer lengths of haul occupy more capacity. Longer transit times mean trucks cannot pick up other freight. A load moving from Los Angeles to Chicago covers roughly 2,000 miles and occupies three to four days of a single truck’s time. A load moving from Atlanta to Nashville covers around 250 miles and occupies roughly half a day, depending on loading and unloading times.
In that sense, a shrinking length of haul should have freed up capacity over the past two years, as trucks are cycled more frequently — even despite the strengthening in demand seen recently (up approximately 10–15% year-over-year in early June). Yet tender rejections sit at multi-year highs above 17%, while spot rates are surging across all three main trailer types.
The data suggests that one driver of deteriorating load lengths is the loss of share to railroads in the form of intermodal — a topic we have covered numerous times. Intermodal holds a strong cost advantage over trucking on longer transcontinental lanes but struggles to compete on shorter distances.
Intermodal lost share to trucking during the pandemic when it couldn’t keep pace with demand. Since then, railroads and carriers have invested in infrastructure and expanded capacity to handle greater volume and demand surges. Loaded international container volumes (ORAILINTL) were up approximately 11% year-over-year last week according to SONAR’s intermodal volume data, while domestic container volumes (ORAILDOML) were up 14%.
International container volumes are a direct derivative of imports, as containers are loaded from ships and port yards directly onto trains. Domestic containers typically originate in the U.S. and are transloaded at warehouses.
Intermodal has a cost advantage, but service favors trucking due to its ability to move directly in and out of shipper facilities with fewer touchpoints. Intermodal contract savings averaged between 10% and 20% in 2024 and 2025, but that gap has widened rapidly this year as truckload rates have climbed.
Intermodal pricing is closely tied to truckload, as railroads and carriers won’t leave money on the table. Rates are expected to rise for intermodal this year, but not enough to push loads back to trucking.
The deciding factor for whether a load moves by intermodal or truck is service. Shippers have had ample time to move freight domestically in recent years, as internationally sourced freight has been disrupted by growing global tensions. Houthi attacks in the Red Sea have altered shipping lanes for multiple years, disrupting service patterns. Unpredictable U.S. trade policy has also led many companies to import goods well ahead of expected demand. This just-in-case inventory strategy favors rail, since the extended lead time makes slower transit acceptable.
That dynamic has shifted in recent months, according to the Logistics Managers’ Index, which surveys hundreds of supply chain managers across a broad range of businesses. Inventory levels are now being managed just above replenishment as inventory carrying costs have surged.
Interestingly, this shift has not pushed load lengths higher. Imports have remained low relative to the previous two years, and most of the demand fueling the truckload market has come from moves under 250 miles, pushing carriers toward a more regionalized approach. The recent trend of shrinking load lengths is therefore less about modal shift alone and more about a disproportionate growth in short-distance moves.
Most of the retail freight that dominates the fourth quarter arrives via ship in August and September. Will trucking see a surge in long-haul demand that further deepens the current capacity crunch later in the year — and how will transportation managers respond?
A last-minute import flood could strain transportation networks later in 2025, but it is unlikely to persist, as supply chains have been permanently altered to some degree. It also makes the prospect of a transcontinental railroad merger that much more intriguing.
About the Chart of the Week
The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.
SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.
The FreightWaves data science and product teams are releasing new datasets each week and enhancing the client experience.
Four leading AI models discuss this article
"The shrink in miles may be cyclical rather than structural; a rebound in long-haul demand could re-tighten capacity and push long-haul rates higher, challenging the notion of a permanent regional shift."
While OALOHA shows shrinking average haul lengths, the evidence may reflect seasonality, demand mixes, and tender-construction quirks rather than a durable structural shift. Tender rejections at multi-year highs amid rising spot rates suggest long-haul lanes still face tight capacity in places, and the broader macro context (inventory cycles, imports, driver supply) can swing lane mixes quickly. Missing context includes lane-level dynamics, equipment and driver constraints, and regulatory effects. The risk is that a rebalancing of demand—especially a rebound in longer-haul activity—could re-tighten capacity on core lanes and keep pricing power concentrated there, not in regional moves.
This could be a temporary phase tied to restocking cycles and seasonality; if demand reaccelerates for long-haul lanes, capacity will tighten again and long-haul rates will surprise to the upside, undermining the case for a durable regionalization.
"The sustained decline in average length of haul represents a permanent regionalization of supply chains that devalues traditional long-haul trucking assets."
The shift toward shorter lengths of haul (LOH) is a structural optimization, not just a modal drift. By regionalizing supply chains to mitigate inventory carrying costs, shippers are effectively reducing their reliance on long-haul trucking, which historically provided higher margins for carriers. While the article highlights a capacity crunch, the 17% tender rejection rate suggests a mismatch between available regional capacity and the specific service requirements of short-haul freight. If this trend persists, carriers heavily exposed to long-haul lanes—like J.B. Hunt (JBHT) or Knight-Swift (KNX)—must aggressively pivot to regional density or risk margin compression as their equipment utilization efficiency drops.
The 'structural shift' thesis ignores that short-haul growth may simply be a cyclical reaction to low import volumes; if a massive Q4 import surge occurs, the system will instantly revert to long-haul reliance to clear port congestion.
"Tender rejections at 17%+ despite 21% fewer miles per load suggests the capacity freed by shorter hauls isn't reaching the market efficiently, indicating structural supply-side friction that rate spikes alone may not resolve."
The article frames shrinking haul lengths (607→500 miles, -21%) as structural, but conflates two separate phenomena: intermodal recapture on long lanes AND disproportionate growth in short-haul moves. The real concern is capacity utilization math. If 11% of the decline happened in the past year while demand grew 10-15% YoY and tender rejections hit 17%+, then either: (a) supply collapsed faster than demand grew, or (b) the freed capacity from shorter hauls isn't being redeployed efficiently. The article assumes (b) but doesn't quantify it. Spot rate surges despite higher truck cycling suggests structural undersupply, not just modal shift. Q4 import surge timing matters enormously.
If short-haul demand is genuinely permanent (e-commerce, last-mile, regional distribution), then higher truck utilization per asset actually improves carrier economics despite lower per-mile revenue—meaning the capacity 'crisis' is overstated and rates may not sustain.
"Shorter hauls represent a durable regionalization of freight that will limit broad-based rate gains despite current tightness."
Shrinking average haul lengths from 607 to 500 miles since mid-2024 reflect a structural shift toward regional freight and intermodal share gains on long lanes, not a temporary dip. This has offset some capacity pressure from 10-15% demand growth, yet tender rejections above 17% and rising spot rates show short-haul volume is overwhelming the freed assets. The key risk is whether Q4 import surges restore longer hauls or if just-in-case inventory drawdowns keep freight localized. Carriers with dense regional networks may capture disproportionate upside while long-haul pure-plays face persistent utilization headwinds.
A late-2025 import flood from disrupted global shipping could rapidly lengthen hauls and intensify the capacity crunch the article already flags as possible, reversing the structural narrative within months.
"The 17% tender rejection rate is not a durable indicator of structural regionalization; lane-level data and macro cycles will determine whether long-haul demand rebinds, potentially reversing shorter-haul gains."
To Gemini: 17% TR is alarming, but it's coarse and lane-aggregated. The risk is mistaking a cyclic shortage for a durable structural shift; a Q4 import surge or an acceleration in e-commerce restocking could re-lengthen demand and push long-haul utilization back up, squeezing regional margins that assumed capex reallocation. The more important signal is lane-level profitability and asset rotation, not headline tender rejection rates.
"The move toward regionalization likely increases deadhead risk, potentially offsetting any perceived gains in asset utilization or margin efficiency."
Gemini’s focus on regional density ignores the massive 'deadhead' risk inherent in short-haul optimization. If carriers like Knight-Swift pivot too aggressively toward regional lanes, they risk becoming trapped in localized capacity imbalances where return-load ratios are volatile. Claude is right to question the utilization math; if short-haul freight doesn't offer the same backhaul reliability as long-haul, the supposed margin improvement is an illusion. We are overestimating the efficiency of this regional shift while ignoring the hidden cost of empty miles.
"Deadhead risk is valid but requires lane-level backhaul data the article doesn't provide; without it, we're guessing whether regionalization is shipper-pull or carrier-push."
Gemini's deadhead risk is real but underdeveloped. The article doesn't break out backhaul ratios by lane type—we're assuming short-haul return loads are worse, but regional density often improves matching efficiency if carriers own the network. The bigger miss: nobody's quantified whether the 11% haul-length decline is driven by shipper choice (structural) or carrier capacity constraints forcing them into shorter lanes they'd abandon if long-haul capacity returned. That distinction determines whether rates stick or collapse.
"Tender rejections and spot rates show demand-driven short-haul pressure rather than carriers merely being forced into shorter lanes."
Claude's shipper-vs-constraint distinction matters, yet the 17% tender rejections paired with rising spot rates despite shorter hauls indicate demand pressure is pulling capacity into regional lanes rather than carriers being forced there. This dynamic could sustain margin pressure on long-haul networks even if overall supply rebounds, because shipper-driven regionalization via inventory cycles tends to persist longer than pure capacity mismatches would suggest.
The panel agrees that the shift towards shorter lengths of haul is a structural change, but they disagree on its implications for long-haul carriers. While some argue that this shift could lead to margin compression for long-haul carriers, others suggest that a rebound in longer-haul activity could re-tighten capacity on core lanes and keep pricing power concentrated there.
Carriers with dense regional networks may capture disproportionate upside while long-haul pure-plays face persistent utilization headwinds.
The risk is that a rebalancing of demand, especially a rebound in longer-haul activity, could re-tighten capacity on core lanes and keep pricing power concentrated there, not in regional moves.