Bernstein argues the U.S. trucking market is shifting from an extended period of underpriced operations toward a sustained supply-constrained environment. After roughly 40 months of running below fully allocated cost, the research house expects truckload contract rates to increase roughly 22% by the end of 2027, a move Bernstein attributes primarily to capacity exits rather than a rebound in freight demand.
The firm points to several structural pressures that have removed previous levers carriers used to undercut costs. Sources of financing that once supported below-cost operations - including inexpensive used equipment and owner-operators willing to accept compensation below market rates - are now largely depleted. At the same time, regulatory and market frictions are likely to reduce the available driver pool.
Specifically, Bernstein cites the impact of the non-domiciled commercial driver’s license (CDL) rule, which it expects will remove approximately 6% to 7% of the for-hire driver stock over several years. Additional constraints - higher insurance costs, more stringent broker vetting, limited training capacity and the altered economics of equipment ownership - create friction for drivers and smaller operators seeking to return to the market. Together, these forces, Bernstein says, will lift the industry’s cost floor and make it more durable, even if freight demand remains flat or only modestly positive.
On pricing, Bernstein’s forward view for dry van contract rates, excluding fuel, is detailed: rates are expected to rise from $2.26 per mile in June 2026 to about $2.76 per mile over roughly eighteen months. That projection comprises two parts - a 13.8% catch-up to spot moves that have already taken place plus an incremental 7.2% driven by further capacity exits.
Preferred equity exposures
Within that framework, Bernstein highlights three stocks it believes offer attractive exposure to the supply-driven rate reset.
- Knight-Swift (KNX) - Bernstein initiated coverage with an Outperform rating and a $91 price target. The firm describes Knight-Swift as the cleanest expression of the truckload rate reset because truckload operations make up 65% of the company’s revenue and 72% of its segment profit. Bernstein quantifies the sensitivity to pricing, noting that a one-point rate move would be worth roughly 18% of consolidated adjusted EPS. In the less-than-truckload (LTL) segment, Bernstein anticipates a 12% to 16% cumulative uplift in revenue per shipment over two years if market tightness persists. Separately, Citizens recently maintained a Market Outperform rating on Knight Transportation, citing a favorable economic outlook from the Federal Reserve of Chicago.
- XPO (XPO) - Also rated Outperform with a $244 price target, XPO appears to offer substantial price-to-volume gearing, cited at 2.74x. Bernstein highlights XPO’s large identifiable cost opportunity: wages account for 51.1% of North American LTL revenue at XPO versus 47.0% at Old Dominion, representing 4.1 percentage points of reachable margin. Bernstein believes XPO has been narrowing the margin gap to peers and that this progress should accelerate in a tighter-rate environment. The company reported second-quarter 2026 adjusted earnings of $1.70 per share on revenue of $2.35 billion, topping analyst expectations. Following these results and margin improvement, Moody’s Ratings upgraded XPO’s corporate family rating to Ba1, citing sustained margin expansion and improved credit metrics.
- Saia (SAIA) - Bernstein assigns Saia a $439 price target and says the company delivers the highest volume gearing and absolute price gearing in the group. Saia has the potential to meaningfully reduce purchased transportation costs as recent investments in its network mature. Having recently completed its network expansion to full national service, Bernstein views Saia as early in a margin cycle and under-earning relative to its door share. Saia’s own recent performance supports the bullish view: the company posted record second-quarter 2026 revenue of $956.5 million and diluted earnings of $3.51 per share. After the quarter, Stifel upgraded Saia’s rating to Buy from Hold.
Implications and positioning
Bernstein’s analysis frames the upcoming period as one where supply-side changes - driven by capacity exits, regulatory impacts on drivers and the exhaustion of below-cost operating inputs - are the primary catalysts for rate gains. The research house ties company-level opportunities to these structural dynamics, emphasizing earnings sensitivity to rate moves and the potential for margin recovery in LTL networks as networks reach maturity and purchased transportation is reduced.
For investors, the firm’s top picks - Knight-Swift, XPO and Saia - provide differentiated exposures to the same macro trend: Knight-Swift offers concentrated truckload leverage, XPO presents a path to margin improvement in LTL through cost recovery, and Saia carries high volume and price gearing alongside network-led margin upside.