Trucking Recovery Held Back by Capacity Squeeze

The ongoing capacity crunch is not just a story of fewer trucks; it's a reflection of a freight market that has seen tens of thousands of carriers exit over the last 47 months of a freight recession. This supply-side shrinkage means that even without a significant spike in demand, the competition for available trucks is fierce, driving spot rates up by 24-27% year-over-year. A significant, and perhaps under-discussed, factor set to tighten capacity further is the "non-domiciled CDL rule" effective March 16, 2026. This regulation could impact up to 200,000 commercial driver's license holders, with Uber Freight estimating that full enforcement might lead to double-digit growth in spot rates. This regulatory pressure coincides with a market where national tender rejection rates are already hitting 13.4-14%, levels not seen consistently since 2022. For the Inland Empire industrial market, this logistics environment has a direct impact. While overall industrial vacancy rose to 8.1% in Q4 2025, this masks a key divergence: vacancy for big-box warehouses (300,000+ sq ft) is near 10%, while facilities under 50,000 sq ft remain tight with vacancy around 4.8%. This suggests that demand for smaller, more localized distribution points—potentially to bypass strained trucking networks—is robust. Despite a general softening, the Inland Empire continues to attract tenants, especially those seeking large-scale, modern facilities with proximity to ports and rail. Direct asking rents averaged $1.13 per square foot in Q4 2025, a decrease from the previous year, but the market is expected to stabilize and improve in 2026 as new construction slows and absorption increases. 3PLs and e-commerce operators remain powerful drivers of this demand, seeking to reduce delivery times to Southern California's 24 million consumers. E-commerce tenants are projected to account for nearly a quarter of all new U.S. warehouse leasing in 2026. This sustained leasing activity from logistics-intensive users underscores the region's critical role, even as the market recalibrates. This push for supply chain resilience and proximity to consumers is fueling a trend toward micro-fulfillment centers. These smaller, urban-located hubs are designed to shorten last-mile delivery times and costs, a strategy that becomes increasingly attractive as line-haul trucking becomes more expensive and less reliable. This shift points to a future where warehouse location is as much about bypassing logistical bottlenecks as it is about simple storage.