Commentary

By Jason Miller

Trucking demand growth depends on construction of warehouses , offices , data centers and manufacturing plants .

While I forecast that demand conditions in the US for-hire trucking sector will improve in 2025 after about 10 quarters of freight volume declines , mixed conditions in nonresidential construction pose headwinds for freight demand — according to an analysis of US Census Bureau data adjusted for inflation , when appropriate .

The challenges for truck demand growth vary depending on the four major sectors : warehousing , office , data centers and manufacturing .

Warehouse construction

Warehouse construction experienced a boom after the onset of the COVID-19 pandemic , as retailers rushed to add fulfillment center capacity in response to a sharp increase in e-commerce sales , which saw more than 40 % year-over-year growth starting in the second quarter of 2020 through early 2021 .

However , demand for warehousing space has cooled since 2022 highs because retailers , such as general merchandisers , downsized inventories by about 9 %, after increasing physical inventories by almost 20 % above pre- COVID-19 levels by mid-2022 . Consistent with falling warehousing demand , the inflation-adjusted value of warehousing construction declined approximately 19 % in 2024 from 2023 levels , with the important caveat that current construction levels remain near those witnessed in late 2019 .

The good news for trucking companies hauling these construction materials is that construction appears to be moving along the bottom of a trough . Considering that we are entering 2025 with interest rates 100 basis points below their 2024 levels , Chinese e-commerce firms expanding their US warehousing footprint to provide more rapid fulfillment and increasing scrutiny of de minimis shipments ( such as Mexico ’ s recently announced crackdown of duty-free textile and apparel imports ), positive demand tailwinds should result in more demand for warehousing space .

Office building construction

Despite the attention devoted to warehousing construction , office building construction exceeds warehousing construction by a wide margin on a dollar-value basis , averaging

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60 Journal of Commerce | February 3 , 2025 www . joc . com