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THE NORTH AMERICAN ROAD FREIGHT
TRANSPORT MARKET SIZE & GROWTH - 2023,

2024 AND 2028
By Shruti Sasidharan, Thomas Cullen, Ti

September 2024
Industry Paper #352
INTRODUCTION
The North American road freight market remains cyclical, as
evidenced in 2023. The market has been characterised by high
inflation, interest & insurance rates, fuel costs, labour disputes as
well as the onset of decarbonisation regulations. However, a surge in
consumer spending and near-shoring activity has eased the impact
of economic headwinds.
The North American market has grown from €472.74bn in 2022 to

€477.03bn in 2023. The market grew by 0.9% in real terms and
dropped by 2.1% in nominal terms.
With a market share of 79.6% in 2023, the United States is the largest North American road
freight market, and hence has a significant impact on the overall performance of the region.
The market is projected to rise by 2.2% to €487.29 billion in 2024, with a CAGR of 1.4% between
2023 and 2028 (€511.14bn).
North American Road Freight Market Size, Real & Nominal Growth (2018-2028 (F))
Source: Ti
The North American Road Freight Market Size & Growth - 2023, 2024 & 2028 © Transport Intelligence 2024
UNITED STATES
The United States road freight market amounted to €379.89bn in 2023 from €377.21bn in 2022.
The real growth for this year was 0.7% whereas the market dropped by 3.9% in nominal terms.
According to data from the Bureau of Transportation Statistics, road transport continued to be
the dominant form of freight transportation in North America, accounting for 60.1% of total
flows in Canada and 72.2% in Mexico in 2023.
Modal Percent Value of US Merchandise Trade with Canada and Mexico: 2023 (USD Actual)
Source: US Bureau of Transportation Statistics
The US posted its largest trade deficit on record in 2023. The overall trade gap was $773.4bn,
down 18.7% from the $951.2bn in 2022. Interestingly, resilient consumption has helped
underpin the US economy; nevertheless, increased interest rates have restrained consumer
spending and put further pressure on imports.
A fall in nominal growth may be linked to an increase in fleet operational costs. For example,
Knight-Swift Transportation Holdings' annual operating costs in 2023 were $6.8bn, up 7.3%
from 2022. The provider associated this rise with the California Air Resource Board's (CARB)
implementation of zero-emission vehicle regulations in April 2023.
The US road freight market is poised to expand by 2.3% in 2024 to €388.64bn, with a CAGR of
1.4% to €406.30bn between 2023 and 2028.
CANADA
The Canada road freight market amounted to €29.79bn in 2023, up from €29.45bn in 2022. The
real growth for this year was 1.2%, making it the second-fastest growing market in the region.
The market grew by 0.1% in nominal terms.
Overall, the Canadian market conditions in 2023 closely mirrored those in the US, with demand
staying relatively steady, albeit lower compared to 2020 and 2021 levels. As consumer patterns
gradually returned to normal, supply and demand conditions eased in the Canadian road freight
market.
The number of truck crossings (incoming from Canada) rose by 1.4% in 2023 despite the
instability brought on by the UAW strikes; marking it the first non-Covid skewed annual
increase since 2016.
The medium- to long-term forecasts for the road freight market in Canada are still optimistic;
the market is expected to grow by 1.2% in real terms in 2024 to reach €30.13bn, and by 1.1%
CAGR between 2023 and 2028.
MEXICO
Mexico’s road freight market amounted to €67.35bn in 2023 from €66.07bn in 2022. The
market grew by 1.9% in real terms and 7.6% nominally. The Mexican economy grew by 3.2% in
2023, the second consecutive year of growth exceeding 3%, a moderation after the post-
pandemic rebound.
Given its location, scale and proximity to the world’s largest consumer market, the USA, Mexico
has got plenty of growth potential. Due to the growing interest in near sourcing because of the
challenging conditions and relationship with China, it has often been said that this should be a
‘golden era for investment’ in Mexico. This is also reflected in the U.S. Foreign Direct
Investment (FDI) increases seen in Mexico. According to Mexico’s secretary of the
economy (SE), there were 378 foreign direct investment (FDI) announcements in 2023, totalling
over $6.4bn.
However, driver shortages represent a pressing concern. According to the International Road
Transport Union, Mexico's road freight market now has up to 56,000 vacant driver positions,
representing a 9% rise year-on-year in April 2024, compared to the same month in 2023.
Mexico's truck driver deficit is expected to nearly treble, with 106,000 vacant posts (14% of
total positions) by 2028. The Mexican road freight market is also faced with significant
challenges related to cargo security. For instance, a 5% spike in tractor-trailer thefts were
recorded between January and April of 2024, according to the National Association of Vehicle
Tracking and Protection Companies (ANERPV).
These challenges, however, do not impede growth in the country's road freight market, which is
expected to rise by 1.8% to €68.59bn and at a 1.7% CAGR between 2023 and 2028.
North America Road Freight Market Share by Country 2023
Source: Ti
NORTH AMERICAN ROAD FREIGHT SUPPLY AND DEMAND ANALYSIS
DEMAND & SUPPLY: CASS INDEX
Source Werner/CASS/FRED
DEMAND
The North American economy has grown at a consistent and respectable rate over the past
year, but as with so many areas of logistics at the global level, the headline economic growth
hides a great deal of volatility within different market segments. Road freight is generally so
ubiquitous that its growth is a reflection of growth in the wider economy. This is less the case at
present.
The US has experienced solid growth despite tightening monetary policy and deteriorating
household finances. The speculation at the beginning of the year was that higher interest rates
would lead to lower growth, not least as so much of US growth was being driven by consumer
spending. However, this has not happened and although there are signs of a loosening of the
labour market. Retail sales are projected to grow at around 2.9-3% for the year. Industrial
demand is more equivocal, despite the heavy investment by government. Automotive
production is complicated by the difficulties in managing new technology and aircraft
production that otherwise is seeing very strong demand, is hampered by the problems at
Boeing. Chemical production is strong, as is energy. Bulk sectors, which in the past have been
important to road freight, are variable. Coal remains stronger than might have been anticipated
but agricultural demand in Canada and the US is coming-off previous highs. One factor worth
noting is the developing US position in trade. This is complicated by political issues, however
both exports and imports in the US are robust, continuing to make the logistics of container
ports increasingly important to the American economy.
The Canadian economy has not seen the sort of strong consumer demand growth of the US
economy through 2023-2024, however growth has increased in Q2 2024 and looks to likely to
be sustained into 2025. Consumer demand was muted until the second-half of 2024 and it likely
that this will recover, with immediate effects on retail exposed road freight. The problems in
Canadian rail and port networks have not been realised as of early September 2024, with the
Federal Government intervening to prevent strikes. It is unclear if this can be sustained.
The Mexican economy has not seen the strong demand conditions seen in its northern
neighbours, with GDP in the second-half of 2024 looking to be around 1.5%. However, one area
that is dynamic is cross-border trade, driven in part by trade with China. This has had a
significant impact on road freight demand in Northern Mexico, especially in the container trade
sectors. Automotive demand has also increased, with production increasing in the region of 5%
year-on-year by mid-2024. Again, the headline figures hide a complex picture. No-longer is
Mexican component and finished vehicle flows dominated by trade with the US. China has
become a major trade partner and Chinese automotive producers aspire to establish export
routes from Mexico to the US. These changing supply-chain profiles are driving change in the
Mexico-US road freight routes.
E-retailing
Internet based retailing is a very good example of the variability within the wider economy.
During the period 2020-2022 e-retailing saw explosive growth. Unsurprisingly, the volume of
internet retailing went into reverse after the exceptional conditions ended in 2023. Since then,
there has been a fall in domestic generated internet retailing volumes. However, within this ‘big
picture’ of declining internet volumes are very substantial variations.
One of the most striking has been the downward trajectory of the express carriers ‘business-to-
consumer’ operations. Although a large element of these businesses are air freight, an equally
large element rely on road freight, and volumes here have been in decline. Both companies
have seen a shift towards lower priced ‘ground’-based express services, yet even for these
products demand is at best mediocre due to weak internet retailing activity. Yet Amazon, which
has a similar mix of air and road freight in North America, is seeing continuing single-digit
percentage growth. We also see that some ‘last mile’ providers, whilst having seen a violent
fall-back from the volume of business seen in 2022, are now seeing a resumption in growth; an
example of J B Hunt. However, drilling-down into UPS and FedEx reveals that volumes are
growing, but the ‘service mix’ has changed, with an appetite for cheaper, less responsive
services. This highlights another change in the profile of internet-retailing driven logistics which
is the explosion of ‘Chinese’ low-cost sites, notably Shein and Temu. They are now moving high
volumes by air into the US from China and this must be having an effect on demand for air/road
freight operations out of North American airports.
Retailing
Retailing is the largest single driver of demand for road freight in North America. Over the past
few years its performance has driven not just road freight in North America but also trans-
Pacific sea and air freight. The boom in container traffic out of West Coast ports in particular
was due to retailers responding to demand.
Over the past year the picture for US retailing has changed. Although retail sales have
continued to grow, with Q2 more positive than expected. Overall, the rise in interest rates and
the preceding inflation seems to have restrained retail expenditure only slightly. It is assumed
that anticipated falling interest rates will stimulate consumer expenditure. However, from a
logistics point of view, the trajectory of retail spending has not been quite as welcome as the
top line numbers suggest. The clear trend over the past two years has been a marked shift away
from spending on consumable durables and towards spending on services by consumers. In
particular ‘leisure services’ have seen substantial growth and these are sectors that are less
intensive users of road freight. This one of the reasons why the road-freight sector in North
America has moved on a different trajectory than the economy generally.
The condition of retail driven demand is made more complex by the changing structure of retail
in the US. Although, as discussed above, e-retail has fallen back as a proportion of over all retail
spending, it is still high, at over 20% of gross retail spending and seems to be continuing to
grow. The case of Shein illustrates that the nature of e-retail remains dynamic, with major new
entrants continuing to emerge. This is making life difficult for incumbent physical retailers.
There are signs of large-scale consolidation and this would presumably have implications for
road freight providers.
The prospects for demand from the road freight sector are improving. There are some signs
that the ‘leisure boom’ seen over the past two years has slowed and the composition of
consumer demand is returning to its previous profile. This would imply that it will be easier to
predict road freight demand by reference to consumer spending growth. As American GDP
does seem to be fairly stable, with the predicted recession not being realised, the implications
for retail driven road freight demand seem benign.
The key demand driver will be inventory. Over the past four quarter the lower levels of
inventory have been an important driver of lower demand for truck services. However
inventory levels in retailing are fairly normal at present and the various disruptions on
international supply chains is sustaining retailers aversion to very low inventory.
Container Demand
Another area of intense volatility is container traffic. Over the past year there has been marked
uncertainty about the functioning of the North American port system. The constraints on the
Panama Canal and the threat of strikes on ports on both the West and East coast resulted in
changes in the structure of logistics systems of major shippers as they attempted to adapt to
changing circumstances. This obviously affected the road freight sector. Demand in California
for container drayage rose sharply through Q3 and Q4 2023 and remained high, bouncing back
from the sharp falls earlier in the year. The inverse was the case on the East coast.
There have also been fluctuations in the flow of containers into and out of Mexico, and to a
lesser extent Cananda. These have been driven by the changing nature of trade with China in
the case of Mexico. This has affected volumes crossing the border between the US and Mexico.
The underlying prospects for this trade are quite good. US trade in particular is growing faster
than GDP, particularly in-terms of imports but also in terms of exports which have seen an
annualised rate of growth of around 2.8% year-on-year in 2024. This implies that the container
trade will grow solidly. Across the whole of North America this picture is complicated, as indeed
it is becoming more complicated across the world. Imports into Mexico from China are rising,
almost certainly as a means of by-passing the increasingly onerous tariff regime in the US. This
is stimulating cross-border traffic, especially container traffic.
SUPPLYSIDE
Labour costs
A salient characteristic over the road freight sector has been the increase in the cost of labour,
particularly the cost of truck drivers. Recruitment and retention problems had been predicted
prior to 2020, however the situation since then has changed, with violent increases in pay.
According to the American Trucking Associations, average driver pay has increased 10% over
the past year. However, the volatility in labour appears to have declined, with major trucking
companies finding it less difficult to recruit and retain drivers. This may, of course, be due to
higher wages.
However, reports from the larger trucking services providers suggest that the cost impact of
higher driver wages has become more manageable. It is not rising costs that are driving down
profits at major trucking operations, rather weak revenue per truck or per truck/mile. The
impression from reports from trucking companies is that higher levels of productivity have
enabled third party providers to absorb these cost increases.
Other Costs
Non-fuel costs drivers, such as insurance or vehicle purchases, appears to have experienced
lower-levels of inflation over the past several quarters. Again, this is implied in the greater
control that trucking companies have over their cost base. 2022 and 2023 saw issues such as
the ability to buy new trucks become a problem, but this is no longer the case. It reflects a
characteristic of the market that inflation is less of a problem that it once was and supply issues
have generally returned to normal.
Market dynamics
What is clear is that the third-party trucking companies have suffered over the past year.
• J. B. Hunt is seeing revenue down 7% year-on-year in Q2 2024 for the whole business.
Revenue for the full-truck load business is down 12%, Dedicated Contract Services down
4% although ‘Last Mile’ is up 5%. Operating income for the whole company was down
24%.
• XPO in contrast saw its core ‘North American Less-Than Truckload’ operation see
revenue increasing year-on-year in Q2 2024 by 57.4% and income increase by 42.8%.
• Werner Enterprises revenue down 6% year-on-year in Q2 2024 whilst operating income
was down 58%.
• Old Dominion revenue was up 6.1% year-on-year in Q2 2024 for the whole business. The
LTL operations saw revenue up 6.2% year-on-year in Q2 2024. Operational income was
up 7.7% year-on-year in Q2 2024.
• Saia revenue was up 18.5% in Q2 2024 for the whole business. Operating income was up
14.4%. Shipments increased 18.1% but tonnage was up 9.7%.
• TFI saw revenue in Q2 2024 at CAN$2.2bn up from CAN$1.8bn whilst operating income
was CAN$208.1m as compared to CAN$192.4m in Q2 2023. This was heavily influenced
by acquisitions.
These are amongst the leading trucking services providers in North America, excluding both the
road freight operations of FedEx and UPS. There are several notable trends:
• Less-than-truck load (LTL) is a buoyant sector and seems to be increasing its market-
share. Major LTL providers such as XPO enjoy strong returns. TFI, which purchased
significant LTL road freight assets from UPS, has struggled, however it appears to be
the exception.
• Full-truck load operations seem to continue to be markedly less profitable and are
losing market share to LTL.
• Some last-mile operations are experiencing surprisingly strong growth. Possibly FedEx
and UPS are losing market share to different types of last-mile provider, such as
providers that are part of 3rd party road freight providers.
Truck Brokerage
A word should be mentioned about the state of truck brokerage in North America. C.H.
Robinson, which has been the largest freight brokerage in North America for sometime has
stabilised profits over recent quarters however other brokerages have suffered. Such is the
market that UPS has sold its once high performing subsidiary Coyote. It appears that the
balance of the market has changed, with owners of physical assets apparently holding the
advantage over non-asset purchasers of freight. This is slightly odd, as is illustrated by the
results of the 3rd party full-truckload providers, utilisation of assets is not exceptionally high.
What may be more important is that shippers or end-users, have increased their investment in
in-house or dedicated trucking fleets.
OUTLOOK
The economy of North America is generally experiencing a benign growth outlook. The
uncertainty of the past two years seems to have been unfounded and despite rises in interest
rates none of the economies in North America have really experienced a recession. The other
characteristic of the past two years has been exceedingly strong consumer demand, that turned
into intense demand for services. This too seems to be returning to normal. Therefore, it ought
to be assumed that the next several quarters will see consumer durable retail grow slightly
faster than consumer demand overall. This may be even more the case in the Canadian market,
where retail has been fairly muted.
There are still exceptional forces in the market. The international trading environment is very
unpredictable, with a strong and, apparently, increasingly tendency towards tariffs. This has
expressed itself in increases in trade out of Mexico. Presumably this will continue, however
such is the volatility towards any form of trade with China, that Chinese driven trade to North
America via Mexico could come under attack.
This shift to normality may have implications for the supply side. The instability over the past
few years seems to have affected the purchasing behaviour of shippers, with for example some
shippers having increased their in-house fleets of vehicles, as indeed have larger road freight
companies. It is possible that this could moderate or reverse. Although the fleet of small road
freight asset operators and owner/drivers continues to drift-down, it is unclear what impact a
shift back to a preference for non-asset-based operations would have. This might be a key
factor in stabilising freight-rates for sectors such as full-truck-load. However, overall a key
factor seems to be the shift by the market away from full-truckload and towards less-than-
truckload. In the longer-term it is probably this, as much as any supply issue that it making life
tough for truckload companies.
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THE NORTH AMERICAN ROAD FREIGHT

TRANSPORT MARKET SIZE & GROWTH - 2023,

By Shruti Sasidharan, Thomas Cullen, Ti

The North American market has grown from €472.74bn in 2022 to

Source: US Bureau of Transportation Statistics

North America Road Freight Market Share by Country 2023

DEMAND & SUPPLY: CASS INDEX

• Supply Chain and Logistics Market Research Reports

• Global Supply Chain Intelligence (GSCi) online knowledge platform

• Consulting and Market Research projects

• Training, Conferences and Webinars.

• Analysis of corporate strategies of leading express, freight forwarding and logistics

• Analysis of supply chain strategies employed in industry vertical sectors: pharmaceutical,

What Sets Ti apart?

• Led by leading industry experienced experts

• Globally recognised and trusted brand

• Global Associate Network provides a multi-country, multi-disciplinary and multi-lingual

• Unique web-based intelligence portals

• On-going and comprehensive programmes of primary and secondary research.

(a) no documents or related graphics are modified in any way;

(b) no graphics are used separately from accompanying text; and

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