What is the current state of the transportation market?
The title of a Wall Street Journal article published a few days ago sums it up nicely: “The Cost of Transporting Pretty Much Everything Just Won’t Stop Going Up.”
“Trucking expenses are at their highest level since the Covid pandemic snarled operations around the world,” the authors report. “Diesel prices are up 77% in the past year. Freight railroads are adding surcharges. And the nation’s busiest port is the busiest it’s ever been. There’s virtually no way for businesses to avoid paying more, and they’re passing on the pain to consumers.”
Remember the freight recession? Yeah, that was so 2024.
When I think of the transportation market, I often find myself singing (in my head, of course) this lyric from one of my favorite Oingo Boingo songs: “We close our eyes and the world has turned around again.”
Based on data from ATA, DAT, and others, freight demand remains relatively soft and uneven. Freight capacity, however, has tightened significantly this year. A big factor has been the removal of drivers from the market. “In the past year-and-a-half, USDOT has knocked over 28,000 drivers off our roads for failing to speak English, forced states to cancel over 30,000 licenses illegally issued to foreign drivers, and purged over 8,000 unqualified training schools from our FMCSA registry,” the Federal Motor Carrier Safety Administration announced on August 31, 2026.
The result of this tightening is a significant increase in contract and spot rates this year. “Dry van spot linehaul rates paid to carriers averaged $2.17 per mile last week, minus fuel, unchanged from the week before,” according to a September 28, 2026 DAT press release. “Rates climbed 31.9%, or $0.52 per mile, year over year and held 18.5%, or $0.34 per mile, above the nine-year seasonal average of $1.82 per mile, near the top of the historical range.”
Another factor driving up costs is the rapid rise in diesel prices, which reached a record of $6.53 on September 23 according to AAA. The upward climb, driven by the conflict in the Middle East, has been months in the making. Back in March, when prices started going up, I wrote “Diesel Prices Are Rising Again. Are Your Fuel Surcharges Ready?” As I wrote at the time — when diesel prices had climbed to $4.859 (cheap by today’s prices) — if your fuel surcharge program was “set and forgotten” a while ago, your transportation budget may be in for a rude awakening.
Everyone is awake now.
All of this is background to a question that popped into my head last week: Will current market conditions, especially record diesel prices, drive demand for electric trucks?
The trigger for this question was a press release issued by Catalyst Mobility, “a global nonprofit advancing clean, equitable, and affordable transportation for people and goods.” The organization, together with the Smart Freight Centre, announced what they describe as the largest electric truck order to date in the United States: 2,500 battery-electric Class 8 trucks, a deal they say will nearly double the current U.S. electric Class 8 fleet.
The order was organized through the ZET SCALE Alliance, which pools freight demand from large shippers, including Microsoft and PepsiCo, to improve the economics of electric trucks. Tesla was selected as the primary supplier for the initial 2,500 trucks, with Kenworth, RIDE, and Volvo also participating. The trucks will initially be deployed in major freight hubs across California, Texas, Chicago, Atlanta, Seattle/Tacoma, and the New York/New Jersey area. ZET SCALE ultimately aims to expand the program to 10,000 or more electric trucks.
So, is this a sign that electric trucks are finally ready to go mainstream? Probably not.
I’ve written about electric freight trucks several times over the past few years, and the fundamental challenges haven’t gone away. Battery-electric Class 8 trucks still face significant hurdles related to cost, range, weight, charging infrastructure, and perhaps most importantly, the availability of enough electricity where and when fleets need it. The rapid growth of AI and data centers is only adding to the competition for power.
(See Pulling The Plug On Electric Trucks?, A Strategy For Charging Electric Freight Trucks, and Do We Have Enough Electricity To Power The Future Of Supply Chains?)
That’s why I’ve argued that the “sweet spot” for electric trucks, at least for now, is not long-haul transportation but shorter, predictable routes, particularly around ports, intermodal facilities, distribution centers, and major freight hubs.
Therefore, it’s not surprising that the ZET SCALE initiative is concentrating deployments in high-density freight markets where the routes are better suited for electrification and charging infrastructure. In short, ZET SCALE is attempting to address several of the barriers I’ve highlighted in the past through scale, concentration, and financing.
Then there is diesel. With prices at record highs, the operating cost equation is changing too. Lower fuel and maintenance costs have long been part of the business case for electric trucks despite their higher upfront cost. The higher diesel prices go — and the longer they remain elevated — the more attractive that equation potentially becomes.
What is the current state of the transportation market?
Changing, always changing.
