At least five trucking and freight companies filed for Chapter 11 bankruptcy in the first half of October, with another headed for Chapter 7, highlighting deepening challenges in the US freight sector, reported New York's The Street.

Despite steady demand, high operating costs, tariffs, and a persistent driver shortage have pushed many firms to collapse. The American Trucking Association estimates a national shortfall of 50,000 drivers, raising costs for businesses and consumers.

Many drivers leave the industry due to low wages and grueling schedules. The recent easing of the shortage is attributed to a downturn in freight demand, not improved recruitment, according to ATA economist Bob Costello.

"It's gotten better for all the wrong reasons," Costello said, warning that any rebound in demand could reignite the shortage.

Transportation economist Michael Belzer called trucking "the canary in the coal mine," noting its razor-thin margins and self-cannibalizing structure. Over-expansion during the pandemic boom has left many firms overleveraged.

Fuel and labor costs have been key drivers of insolvency. Tony's Express, a California-based company founded in 1954, filed for Chapter 11 in 2024 after failed takeover talks and unsustainable operating costs.

Daniel Alpert of Westwood Capital said companies overinvested in trucks and drivers during a temporary demand spike, leaving them exposed when conditions normalized.

The ongoing wave of bankruptcies underscores the fragility of the freight industry and its role as an early indicator of broader economic stress.