Industry economist predicts that 600,000 truck drivers could be removed from the industry, leading to a significant capacity purge. Freight market experiences a decline of 18% in volumes, causing challenges for motor carriers and brokers. Regulatory changes and a weak market signal a turbulent period ahead, affecting carriers and brokers alike.

Recent regulatory changes and decreased freight volumes are expected to create a massive capacity purge in the trucking industry. Changes in U.S. immigration policy will eliminate between 5% to 12% of CDL holders, potentially affecting over 600,000 drivers. Carriers relying on immigrant labor or not meeting new rules may go out of business.

The combination of regulatory changes and market downturns may lead to bankruptcies among carriers and brokers. The market shift favors larger asset carriers who can weather the storm. Improved driver pay and incentives will be necessary to attract qualified drivers from a shrinking pool. The transition period is expected to be challenging.

The freight industry is on the brink of a transformative period with an anticipated capacity washout. Regulatory changes and market weakness will lead to increased spot rates and stabilized contract rates. Shippers should prepare for rate volatility, while carriers have an opportunity to operate under more traditional supply-demand principles.

Read more at Yahoo Finance: Largest capacity purge in history coming