The freight market is entering a potentially transformative "super cycle," according to Lee Klaskow, a senior analyst at Bloomberg Intelligence, who laid out his case on FreightWaves Today. After years of unsustainably low rates that forced many truckers out of business, structural supply constraints and increased regulatory enforcement are creating a new landscape — one with direct implications for carriers pricing contracts, shippers managing transportation budgets, and profitability and liability across the supply chain.

Klaskow said the trucking industry is entering a prolonged upcycle and that he is "extremely bullish" on the less-than-truckload (LTL) space, followed by truckload, arguing the conditions underpinning the current cycle are durable rather than temporary.

An unsustainable rate environment

The rate environment of recent years was simply unsustainable, Klaskow said, pointing to widespread financial distress among mid-sized carriers.

"A lot of mid-sized truckers that I've talked to through my channel checks have indicated that, thank God that it turned when it turned because they were mortgaging their house," he said. "They were bootstrapping their own companies because all of the savings that they made during the pandemic — it's totally run out."

That backdrop matters for the broader freight market because carrier exit and balance-sheet strain can change how quickly capacity returns even after demand improves, making rate behavior more dependent on the surviving fleet than on a simple rebound in volumes.

Why more regulation benefits trucking

On regulation, Klaskow took a position that may surprise some in the industry, arguing that more oversight actually benefits trucking. He noted that electronic logging device (ELD) mandates, intended to level the playing field, were undermined when bad actors hired hackers to roll back hours-of-service records.

"Having more regulation is actually a better thing for the trucking industry. I'm not saying we're going to go back to the days of being the industry being fully regulated, but having some sort of a floor for a rate isn't necessarily a bad thing if you're looking at a lot of these trucking companies," Klaskow said. In his view, tighter regulation supports the industry by establishing a rate floor, and he said the current freight upcycle has the elements to last well beyond two years.

For shippers and carriers alike, that means compliance is not just a legal issue but a market-structure issue, because enforcement can influence how much pricing pressure the industry can absorb and how much leverage well-run carriers retain.

LTL margin gains and pricing leverage

In the LTL sector, Klaskow highlighted Old Dominion's operating ratio falling to 70, XPO reaching an 80 OR, and even unionized carrier ArcBest achieving a 90 OR as evidence of meaningful margin improvement. LTL carriers are securing mid-single-digit rate increases, and pricing leverage over tonnage runs roughly 3-to-1, making pricing gains far more impactful than volume swings. He added that rising weight-per-shipment figures across carriers are a typical precursor to demand growth.

Those operating-ratio improvements are notable because LTL pricing tends to reset more visibly than truckload pricing, so the segment often becomes an early read on whether carriers can hold discipline as volumes change.

Ocean freight: dislocation-driven gains carry risk

In ocean freight, Klaskow said the liner market has benefited enormously from capacity dislocations caused by vessels rerouting around the Suez Canal and the Strait of Hormuz. Maersk, he noted, raised its EBIT guidance to $4.5–$6.5 billion from a prior range of $2–$4 billion, driven by strong demand out of China and elevated spot rates.

He warned, however, that roughly one-third of Maersk's ships are already returning through the Suez Canal — a risk he said he would find uncomfortable from an insurance standpoint given ongoing Houthi attacks. Without the current dislocations, he added, ocean supply would be outpacing demand "almost by a 2-to-1 ratio in terms of growth," while a 12-day port backup in China is also artificially supporting rates.

That makes the segment especially sensitive to route normalizations and port congestion, both of which can alter capacity availability faster than demand changes do.

Intermodal strength and a rail merger watchpoint

On intermodal, Klaskow cited rates 34% lower than truckload as the key driver pulling shippers toward rail, compounded by higher diesel prices and improving rail service. Domestic intermodal growth is outpacing international volumes, he noted, and 3% intermodal growth has been a bright spot for railroads year-to-date.

He flagged the proposed Union Pacific–Norfolk Southern merger as a major watchpoint, cautioning that the Surface Transportation Board's tougher merger rules adopted in 2001 require any deal to demonstrate public interest and enhanced competition — a "pretty hard thing to do." The STB recently resumed consideration of the merger after Canadian National dropped its protest and Union Pacific made additional concessions.

Signals to watch as the cycle matures

Klaskow and FreightWaves founder Craig Fuller agreed that the next leg up for trucking stocks likely requires tender rejections to break above 17%. Fuller noted that regulatory momentum and high-frequency freight data — including metrics available on FreightWaves' SONAR platform — will be key signals to watch as the cycle matures.

Klaskow's remarks came during an interview on FreightWaves Today, where he and Fuller discussed the forces driving higher rates and the outlook for ocean freight, intermodal and LTL.