Uncategorized

The freight market continues to struggle in mid-2025, with June marking the 29th consecutive month of year-over-year freight volume declines. While volumes and truckload linehaul rates held steady compared to May, the ongoing slowdown confirms what many small trucking operators already feel on the ground.

This down-cycle is deeper and longer than usual. For owner-operators and small fleets, this continued decline reflects a freight environment under sustained pressure from weak demand, stubborn inflation, and global trade disruptions.

Here’s what you need to know from the June 2025 CTI update and what it could mean for your business.

Freight Volumes Hold Steady, But Recovery Still Out of Reach

The Cass Freight Shipments Index dipped 0.2% month-over-month in June and was down 2.4% year-over-year, marking the 29th consecutive YoY decline. It’s a signal that freight activity is no longer in free fall, but a true recovery still hasn’t begun.

Truckload linehaul rates rose just 0.4% MoM and 1.9% YoY, reflecting a market that’s holding flat rather than gaining strength. While the worst of the decline may be over, demand remains too soft for any real upward momentum in pricing or volumes.

What’s Driving the Ongoing Downturn?

Several key factors continue to weigh heavily on the transportation sector, and none have easy solutions.

1. Tariffs and Trade Pressures

Cass analysts attribute part of the prolonged freight weakness to ongoing tariff uncertainty and global trade friction. These issues reduce shipping volumes, especially at ports and border crossings.

For small fleets that rely on drayage, intermodal, or import-heavy regional freight, that can mean fewer loads, longer wait times, or more deadhead miles. Until global trade stabilizes, cross-border freight demand may stay unpredictable, and that means thinner margins for operators in those lanes.

2. Inflation’s Slow Burn

While general inflation and diesel prices have eased slightly, trucking costs hit record highs. Non-fuel expenses like insurance, truck payments, and driver benefits surged, pushing margins below 2% for most fleets, and into the red (-2.3%) for truckload carriers.

With consumers cutting back, many shippers are moving fewer goods, especially retail and discretionary products. For small carriers, that often means less contract freight, more spot market runs, and lower rates. Planning for longer payment cycles and keeping fixed costs low is critical right now.

3. An Uncertain Economic Outlook

The economy continues to flash mixed signals. Interest rates are still elevated, credit remains tight, and many large shippers are playing defense, minimizing inventory and limiting freight spend. This affects over-the-road carriers, especially those hauling consumer goods, building materials, and electronics.

For small fleets, it’s a sign to be cautious with expansion plans and focus on building cash reserves. It also highlights the value of working with flexible lenders who understand the current climate.

What This Means for Owner-Operators and Small Fleets

For small trucking businesses, the June data reinforces the need for careful planning and smart cash flow management. Here are three takeaways to consider:

• Rates aren’t improving (yet): The flat performance in linehaul rates reflects an oversupplied market. With demand soft, many carriers are still competing on price.
• Operating margins stay tight: Expenditures rose 2.6% YoY in June, the third straight annual increase, even though shipment volumes declined. This indicates rising per-shipment costs, likely due to inflation and reduced economies of scale. (Cass data suggests an implied 5.2% YoY increase in rates per shipment.)
• Access to financing is more important than ever: With higher expenses and sluggish rates, small fleets need fast, flexible access to capital. Traditional lenders are tightening credit, but independent lenders like Mission Financial Services remain committed to helping drivers bridge gaps and stay operational.

How Small Trucking Companies Can Adapt

In a slow freight market, small fleets need to make smart, defensive moves. Here’s how small trucking businesses can respond effectively.

Stay Lean and Cost-Conscious

Now’s the time to audit your expenses line by line. Cut what you don’t need, and double down on operational efficiency. If you have idle trucks, consider pausing commercial trucking insurance or registration on those units.

Shop around for lower-cost fuel cards or service providers. Keep an eye on subscription-based tools or services you may no longer use – every recurring charge matters when revenue dips. A leaner operation gives you more room to ride out volatility.

Protect Your Equipment with Preventive Maintenance

Deferred maintenance might save cash today, but it can cost thousands if a breakdown happens on the road. Prioritize oil changes, tire rotation, brake inspections, and diagnostic checks.

Use telematics or mileage logs to schedule service before issues become expensive. If you’re short on funds, consider a repair loan or trucking financing from a lender that understands the urgency of uptime.

Explore Alternative Financing Options

Traditional banks may be pulling back from small-ticket trucking loans, especially for first-time buyers or operators with credit challenges.

That’s where independent lenders like Mission Financial Services step in. Whether you need help covering repairs, securing a title loan, or freeing up cash for fuel and insurance, our team offers fast approvals and flexible terms tailored to your business.

Stay Informed and Plan Around Market Trends

Use monthly updates like the Cass Transportation Index and Mission Financial Services, In The News, as a tool to guide your decisions. When volumes drop and rates stay flat, it may not be the time to expand.

Instead, focus on protecting cash flow and preserving equipment. When you see positive signals, like sustained volume increases or stronger spot market pricing, you’ll be ready to act.

Conclusion

The June 2025 Cass Index shows a freight market that’s stabilizing at the bottom. With 29 consecutive months of YoY volume declines, recovery remains elusive. Small fleets must stay agile and financially prepared for what could be a slow climb back to stronger volumes.

At Mission Financial Services, we understand what small trucking businesses are up against.

If you need a reliable lending partner to help navigate uncertainty (with fast decisions and industry expertise), we’re here to support you every mile of the way. Get in touch today!

Diesel prices are trending upward, and even small increases are making a big impact on the bottom line for truckers. As of August 2025, the national average for on-highway diesel is $3.80 per gallon.

That’s up nearly five cents from this time last year, with some regions seeing even sharper spikes.

In the Rocky Mountain region, diesel is up more than nine cents year-over-year. California prices remain the highest in the nation at $4.95, marking a 12-cent jump over last year. And on the West Coast outside California, the increase is even steeper – up nearly 24 cents per gallon.

With more financial pressure on owner-operators, understanding what’s driving the trend (and how to respond) is critical.

What’s Driving Diesel Prices in 2025?

The current rise in diesel isn’t just about seasonal shifts. Multiple economic and geopolitical factors are influencing price volatility.

Global Supply Pressures

The global oil market remains tight. OPEC+ has continued production limits through mid-2025, keeping crude supply constrained. This affects diesel prices directly, especially when global demand stays steady or rises.

Meanwhile, US refinery capacity is still lagging behind pre-pandemic levels. According to the EIA, total US operable refinery capacity has dropped nearly 4.5% since 2020. That bottleneck is particularly visible on the West Coast, where environmental rules limit expansion and prolong maintenance downtimes.

Regional Disruptions

California and surrounding states are especially vulnerable to price shocks due to their limited access to interstate pipelines and more expensive blends of diesel fuel.

As of August 2025, California diesel prices hover around $4.95 per gallon – nearly $1.50 above the Gulf Coast region average. These regional gaps create unpredictable operating costs for truckers covering long hauls.

Inflation and Compliance Costs

While overall inflation has cooled slightly, costs tied to refining, fuel transport, and regulatory compliance remain high. Emissions mandates and low-carbon fuel standards add expense at every stage, from the pump to the supplier, and those costs are passed on to drivers. Small commercial truck operators, who often lack the scale to negotiate better fuel rates, bear the brunt.

Economic Uncertainty and Market Reactions

Even without direct disruptions, diesel prices often react to broader economic uncertainty. In 2025, global inflation still lingers, and interest rates remain elevated.

When the market anticipates supply chain shocks, geopolitical tensions, or lower refinery output, diesel prices can spike in anticipation. That volatility makes it harder for small trucking businesses to budget fuel costs per mile from one month to the next.

Impact on Small Fleets and Independent Operators

For smaller operators, higher diesel costs are a serious financial strain. Increased fuel expenses directly reduce take-home profits. And for many, there’s little room to absorb the hit.

Tight margins mean higher operating costs can quickly pressure cash flow. For drivers already managing truck loans or repair bills, that’s a recipe for stress. In some cases, it may contribute to missed payments, refinancing struggles, or loan defaults.

We’re also seeing signs of broader financing stress in the industry. Recent spikes in trucking bankruptcies and a growing inventory of repossessed used trucks suggest more operators are exiting the market or being forced to surrender equipment.

As traditional banks pull back from small-ticket commercial lending, some drivers may find themselves shut out of credit options just when they need support the most.

Strategies to Manage Diesel Price Volatility

Fuel prices may be out of your hands, but how you respond isn’t. With margins shrinking, small fleets need practical ways to stay ahead of rising diesel costs.

Here’s what works:

• Build surcharges into your contracts: If you’re hauling under contract, make sure fuel surcharges are clearly outlined. Align them with current rates and ensure they adjust as diesel prices move. Without this, you’re covering rising fuel costs out of pocket.
• Run leaner, smarter routes: Fuel efficiency starts with smarter planning. Use real-time routing tools to avoid delays, reduce idle time, and group deliveries. Keep up with preventive maintenance, especially tire pressure and engine performance, to stretch every gallon.
• Lock in fuel discounts or prepaid rates: Some providers, like AtoB Fuel Card, offer prepaid programs or discount cards that reduce price swings. If your routes are consistent, locking in fuel rates can give you more predictable expenses and better cash flow control.
• Reevaluate financing relationships: Tighter margins make flexibility even more important. If your current lender isn’t adapting to the market, it may be time to explore alternatives.

Independent lenders like Mission Financial Services understand what small operators face and offer repair loans, title loans, and working capital solutions that move fast when you need them most.

Conclusion

Diesel prices are climbing again, and the effects are real. Higher costs eat into profits, tighten cash flow, and make it harder to stay current on equipment payments. For many small fleets, the pressure is building.

Now’s the time to reassess your fuel strategy, control what you can, and work with lenders who offer support, not roadblocks.

At Mission Financial Services, we’re here to help owner-operators navigate these challenges with fast approvals, flexible programs, and real trucking industry experience. Contact us today for simple and fast trucking solutions.

Bankruptcy filings are surging across the US, with the commercial trucking industry caught in the crosscurrents of a challenging economic environment.

Understanding how bankruptcies affect you (and how to protect yourself in the event of one) has never been more important. From repossession risks to legal strategies, we’ll show you how to navigate the turbulence and stay in control.

Why Are Bankruptcies Surging in 2025?

Bankruptcy is back in the headlines, and this time it’s hitting the freight and transportation sectors.

According to recent data, total bankruptcy filings in the US are up more than 10% year-over-year. Perhaps more concerning, Chapter 11 filings (a type of bankruptcy filing used by businesses seeking to restructure their debts) rose 62% in just one month (May 2025).

What does that mean for truckers?

Simply put, the financial headwinds in this economy are making it harder for many small and midsize carriers to stay afloat. Bankruptcy has become a last-ditch strategy to reorganize, liquidate, or buy time, but it doesn’t just affect the company filing.

Key Drivers: Inflation, Interest Rates, and Market Instability

One of the primary drivers of trucking bankruptcies in 2025 is the so-called “Great Freight Recession.”

On one hand, shippers are moving fewer goods. On the other, the industry has too much capacity, with trucks and drivers sitting idle or hauling freight at unprofitable rates.

This oversupply isn’t temporary. Companies quickly expanded during the COVID freight boom, adding trucks and drivers. As demand normalized, those assets became liabilities.

Today, many operators are still locked into high equipment payments or leases they secured when rates were sky-high, and they can’t generate enough income to cover them.

Beyond freight rates and capacity issues, the larger economic picture plays a critical role. Inflation continues to drive up the cost of everything from tires to insurance premiums. Operating costs, which are already high in the trucking business, are becoming even more burdensome.

Interest rates have also remained elevated, making borrowing more expensive. For small fleet owners trying to refinance or secure working capital, that means tighter cash flow and limited access to affordable credit.

Meanwhile, geopolitical tensions and supply chain disruptions add uncertainty, creating a volatile environment that hinders long-term planning. Truckers who were already operating on thin margins now find themselves squeezed from all sides.

What Bankruptcy Means for Independent Truckers and Small Fleets

When a trucking company files for bankruptcy, the consequences don’t stop at the company’s front door. They ripple out to every connected party, especially lenders, equipment lessors, and individual truckers who depend on financing to stay on the road.

How Bankruptcies Affect Financing Options

In stable times, lenders offer decent terms, quick approvals, and manageable requirements. But today, those terms are tightening.

Bankruptcies make lenders cautious. They’re looking harder at credit profiles, business plans, and cash flow. For first-time buyers or those with poor credit, it may be harder to get approved.

Some lenders are stepping back from trucking altogether. Others are adding new requirements or raising interest rates to manage risk.

Repossession Risks and Collateral Loss

Most truck loans and leases are secured. That means your rig is the collateral. If you miss payments, the lender has the legal right to repossess the vehicle.

But repossession is expensive and time-consuming for lenders. Most would rather find a way to keep you operating if they believe the loan can still be paid.

That said, if you or someone connected to your revenue stream goes bankrupt, lenders may decide that recovery is the safest option. And if your loan is already on shaky ground, they may act to protect their asset.

Creditors’ Rights in Bankruptcy: What Every Trucker Should Understand

When bankruptcy proceedings begin, everyone wants to know the same thing: who gets paid, in what order, and what happens to any collateral. Understanding how creditor rights work can protect your equipment, your money, and your future.

What Is a Secured vs. Unsecured Creditor?

In bankruptcy cases, creditors are treated differently based on collateral. A secured creditor has a legal claim to specific assets, like your truck or trailer. If the borrower defaults, the lender can repossess the asset to recover their loss.

An unsecured creditor has no collateral. They’re usually last in line for repayment. This includes repair shops, fuel suppliers, or anyone owed money without a lien or contract.

If you financed your truck, your lender is almost certainly secured. That means they have more legal options if you miss payments or file for bankruptcy.

However, if you extend credit to another driver (such as letting them use your truck or delaying a payment), you may be considered unsecured unless you have filed a lien.

Understanding Lease Agreements and Recovery Options

Leasing a truck instead of buying can lower upfront costs. But it comes with rules that are important in bankruptcy situations.

If you’re leasing equipment from someone else and they file for bankruptcy, your ability to keep using that truck depends on the lease type:

• True lease: The lessor owns the truck. If you fall behind on payments, they may be allowed to take it back.
• Finance lease: The lease acts more like a loan. You may be required to keep paying, even during bankruptcy.

If you file for bankruptcy, your lessor must follow legal steps before repossessing the truck, including court approval. Lease agreements specify what happens if you miss a payment. Look for terms like default, termination, and recovery. These explain your rights and how much time you have to fix a problem.

Protecting Your Equipment and Credit During Bankruptcy Negotiations

Whether it’s your business or a key partner entering Chapter 11, knowing how to respond to bankruptcy can help you hold onto your commercial truck, protect your credit, and stay in business.

Why “Adequate Assurance” Matters

In bankruptcy cases, lenders can ask for something called adequate assurance. It’s a legal term, but the meaning is simple: they want proof that you can keep up with your obligations after filing.

Your lender may want to see:

• Steady income from hauling contracts
• Active trucking insurance coverage on your equipment
• A payment plan that shows how you’ll stay consistent

If you can’t provide that assurance, the lender may ask the court for permission to repossess your commercial truck, even if you’re in bankruptcy.

The Role of Legal Guidance

Bankruptcy laws are complex. Add trucking finance into the mix, and it’s easy to get overwhelmed. A qualified attorney can help you understand your agreements, protect your rights, and negotiate with lenders the right way.

And if another company owes you money and files for bankruptcy, a lawyer can tell you whether it’s worth filing a claim or joining a creditors committee.

Large Claims and the Creditors Committee: What It Means for Lenders and Operators

When a company files for Chapter 11, multiple parties may be owed money, including lenders, equipment lessors, and sometimes even other truckers. In cases involving large claims, unsecured creditors can form a committee to represent their interests during the bankruptcy process.

While most small operators won’t qualify to join these committees, if you’re owed a significant amount (for example, unpaid freight from a broker), you may benefit from tracking the committee’s filings and updates. It can offer insight into how the case is moving and whether recovery is likely.

For those leasing or financing trucks, collateral tracking becomes critical once bankruptcy is in play. Lenders may need to monitor where the commercial truck is, whether it’s insured, and if it’s being used properly. Courts expect responsible oversight, not sudden repossession, so lenders often rely on clear, consistent communication from borrowers.

If you’re struggling but still operating, be transparent with your lender. Let them know the truck’s condition and explain how you’re continuing to generate income. This kind of communication can reduce the risk of repossession and help preserve access to future financing.

Staying Financially Resilient in a Shifting Market

Financial resilience is less about luck and more about preparation. While you can’t control the market, you can take smart steps to protect your business and stay ahead of financial trouble:

1. Watch the trends: Keep tabs on freight rates, fuel costs, and bankruptcy filings. A quick weekly scan of industry updates can help you stay ahead of sudden changes.
2. Know your loan terms: Review your lease or loan documents. Understand what happens if you miss a payment, how late fees work, and what triggers repossession.
3. Organize your paperwork: Keep clear records of invoices, payments, maintenance, and trucking insurance. Solid documentation protects you if a dispute arises.
4. Work with lenders who know trucking: A lender that understands your commercial truck business is more likely to offer flexibility and solutions when you need them.
5. Speak up early: If you’re struggling, don’t wait. Contact your lender before things spiral. Being proactive often leads to better outcomes than going silent.

How Mission Financial Services Supports Independent Operators

At Mission Financial Services, we understand the realities of life on the road. That’s why we have built our lending options to reflect the unpredictability of the industry.

We say yes when others say no. Our programs are built for first-time buyers, drivers with bad credit, and those coming back from financial setbacks. When time matters, we move quickly; many of our loans are approved in as little as four hours, helping you get back to work without delays.

We also offer repair and title loans, so if your rig breaks down or you need quick capital, you don’t risk losing your equipment.

Most importantly, we treat our borrowers with respect. Whether you’re growing, rebuilding, or just trying to stay ahead, we’re here to listen, advise, and support your goals.

Conclusion

Bankruptcies are rising, and the road is undeniably rough for small fleet operators and independent truckers. But with the right knowledge, legal awareness, and financial partnerships, you’re not powerless.

Understanding how creditor rights work, what to expect in a bankruptcy scenario, and how to protect your rig and revenue is critical for long-term survival.

Mission Financial Services was built for truckers like you. We offer the flexibility, speed, and understanding you need not just to survive tough times, but to come out stronger on the other side.

The road may not always be smooth, but with the right financial partner, you don’t have to navigate it alone. Get in touch with us today.

 

Charles Smith, Regional Business Development and Marketing Manager at Mission Financial Services, was recently featured in Transport Topics. The article highlighted the significant uptick in used Class 8 truck sales during April 2025 and shed light on a very important insight: the importance of building relationships with customers.

If you haven’t read that article, don’t despair. We’ve explored the industry context behind that article, Charles’ insights on market dynamics, and the Mission Financial Services approach to market challenges, right here.

Industry Context: April 2025 Used Truck Sales Surge

For industry context, let’s look at the used Class 8 truck market and examine the pricing and mileage trends that Transport Topics discussed.

Market Overview

First, it’s been a good time for used Class 8 truck sales. Used truck sales increased for a second month in a row in April 2025. The April figures showed a 3.5% year-over-year gain with a total of 23,600 units sold, and a 4.4% month-to-month jump, too!

This consistent growth demonstrates sustained demand despite broader economic uncertainties. It shows that trucking businesses are investing in equipment despite challenging conditions. It also reflects the essential resilience of commercial transportation.

Pricing and Mileage Trends

The average retail sale price decreased by 1.9% year-over-year to $58,132. Another interesting trend is the reduction in average mileage these used trucks have. It decreased by 4.5% to 400,000 from 419,000, a year ago.

This tells us that newer inventory is entering the used market, providing buyers access to equipment with a longer remaining useful life.

That’s good news for small trucking fleets and owner-operators with budget constraints. It means that buying a used Class 8 truck is more affordable. And lower-mileage vehicles also typically qualify for better loan terms and longer repayment periods.

Charles Smith’s Insights on Market Dynamics

It’s time to turn our attention to the insights Charles Smith shared with Transport Topics.

Navigating Economic Uncertainty

Smith didn’t shy away from the reality of current market conditions. “Used truck sales are, I’m not going to say down, but they’re stagnant right now.”, Smith observed.

He voiced what those in the truck sales industry have been thinking. Potential buyers have struggled with economic uncertainty. Many businesses adopt the wait-and-see approach rather than buying another truck, even when they desperately need to.

This reflects broader economic concerns that impact capital allocation decisions across the trucking industry. The stagnant market conditions he described align with feedback we receive from customers, especially owner-operators, concerned about uncertain future freight demand and operating costs.

Emphasis on Relationship Building

Despite widespread economic challenges, we at Mission Financial Services have maintained growth. And the reason? Charles’ words sum it up best: “It’s about building relationships and, I think, that was a big part of the growth for us.”

He credited the company’s recent sales to working even harder to reach and engage potential buyers. And he explained that building relationships with customers and dealership partners was central to our success.

Mission Financial Services’ Approach to Market Challenges

Mission Financial Services is no stranger to economic difficulty. But we have learned to overcome the obstacles through proactive engagement and collaborative partnerships.

Proactive Engagement

At Mission Financial Services, we take a proactive approach to sales. To quote Charles again: “We’re out pounding the pavement, knocking on doors, still trying to get the ones that are looking to purchase.”

This proactive engagement strategy reflects a crucial truth: successful lending requires ongoing market presence and customer education. Rather than simply waiting for applications to arrive, we actively engage with trucking businesses to understand their needs and provide the best solutions.

Collaborative Partnerships

As Charles emphasized in the interview, dealership partnerships play a critical role in facilitating successful transactions during challenging market conditions. And these are the relationships that enable Mission Financial Services to provide seamless financing solutions.

We recognize that strong dealership partnerships create value for all stakeholders involved in commercial trucking transactions.

Dealers benefit from reliable financing options for their customers, while buyers gain access to streamlined application processes and competitive terms. Our collaborative approach ensures that all financing considerations support, rather than complicate, equipment purchases.

Looking Ahead: Anticipating Market Trends

Several factors will influence used truck sales throughout the remainder of 2025. Freight demand patterns, regulatory changes, and broader economic conditions will all influence the decision to purchase equipment.

But we cannot deny that the financial benefits of used trucks extend beyond the initial purchase. They offer lower depreciation rates, reduced insurance premiums, and accessible financing options. And it’s factors like these that help smaller trucking businesses stay in business and remain profitable.

Therefore, it’s no surprise that the global used truck market is predicted to grow and reach 64.66 billion USD by 2030.

We anticipate that successful trucking businesses will focus on strategic equipment investments that support long-term operational efficiency. This approach requires careful evaluation of financing options and partnership with lenders who understand industry dynamics.

Our Promise to You

Here at Mission Financial Services, we’re still doing what we’ve always done, helping our customers get the financing they need.

However, we understand that small trucking businesses are hesitant to expand their fleet or undertake repairs to their existing fleet at this time. That’s why we’re adapting our programs to support customer success in evolving market conditions.

We guarantee you’ll still enjoy easy access to financial solutions and competitive loan terms. But you’ll also enjoy the service and support you deserve, with solutions that fit your finances regardless of market fluctuations.

Conclusion

We’re very proud that one of our own, Charles Smith, was featured in Transport Topics. He deserves the recognition, and we appreciate the publication’s faith and trust in our expertise. But we’re even more proud of the countless success stories we’ve helped to build with our financing solutions.

At Mission Financial Services, we remain committed to supporting trucking businesses and helping them achieve their business objectives. And we look forward to continued engagement with the trucking community, well into the future.

Contact us today for a tailored financing solution to drive your business’s growth and prosperity.

Asset-backed securities (ABS) are a financial investment backed by a pool of assets, such as loans. Such loans offer benefits to investors, lenders, and borrowers alike. But they are still vulnerable to losses from loan delinquency. And in May 2025, 60-plus day delinquencies for ABS equipment loans spiked.

What is behind these recent ABS equipment loan delinquencies, and what are the implications? We examined the subject of ABS loan delinquencies, their most common root causes, and how to mitigate the risks.

The Current Landscape of Equipment Loan Delinquencies

Recent data from Kroll Bond Rating Agency’s (KBRA) Equipment Loan & Lease Index reveals that 60-plus-day delinquencies in equipment loan and lease ABS surged by 34 basis points (bps) month-over-month in May 2025.

Small to medium-ticket delinquencies jumped 22 bps month-over-month, while large-ticket delinquencies increased 41 bps. Year-over-year, there was an increase of 1,8% in these delinquencies in the current period. This indicates that stress has been building within equipment financing portfolios for some time.

According to Joanne DeSimone, managing director of commercial ABS at KBRA, the increase, specifically of large-ticket delinquencies, “has been driven over the past two years by the stress in transportation assets, the stress in trucking”.

Factors Driving the Increase in Delinquencies in Asset-Backed Securities

Let’s consider the factors driving these delinquencies.

A Symptom of a Larger Problem

Delinquency rates have been increasing across various types of loans for some time. Auto loan delinquency rates, especially, have been increasing across credit scores and income levels. Therefore, we can see that Americans have been struggling to keep up-to-date with loan payments across the board.

Inflation

Rising inflation is often a factor in loan delinquency. Inflation affects the cost of loan repayments. Even a modest rise increases the cost of goods. Even a modest rise increases the cost of goods. And that can make it more difficult to keep up with loan repayments as well.

Equipment loans are crucial for enabling trucking companies to remain operational. But if they’re paying more for essential goods and services, business owners may have to allocate more resources toward basic operations, compromising their ability to service debt obligations.

Low Business Confidence Due to Economic Uncertainty

When businesses feel confident about their future potential, they are more likely to do what it takes to grow their operations. That includes repaying loans, because they know that they will be able to afford it. However, business confidence, especially in smaller businesses, has been weakening.

And the main reason behind that is the economic turbulence that has been plaguing the US. Inflation, monetary policy, freight slowdown, and trade tariff uncertainty have all impacted the economy. This can make small fleet owners fearful of the future and less likely to prioritize loan repayments.

Industry-Specific Factors

Other factors influencing loan delinquency amongst trucking companies are more industry-specific.

The North American trucking industry in 2025 is grappling with various issues, including inflationary pressures from tariffs, trade policy shifts, and market realignments. Freight volumes also remain conservative.

Fuel costs, maintenance costs, labor expenses, supply chain disruptions, and trucking market volatility create a squeeze on cash flow, pushing loan payments to lower priority levels.

And the FMCSA’s proposed regulatory changes add further stress on smaller fleets.

Implications for Stakeholders in Equipment Finance

What are the implications of ABS equipment loan delinquencies for stakeholders?

Lenders

The spike in ABS equipment loan delinquencies creates ripple effects throughout the financing ecosystem. Lenders rethink their risk management strategies and underwriting criteria. Investors worry about returns and portfolio performance.

Investors

The rise in ABS equipment loan delinquencies and the uncertainty they cause can lead to reduced appetite for new ABS issuances. This can potentially constrain the flow of capital into loan and lease pools.

Borrowers

Trucking businesses and other equipment-dependent operations that rely exclusively on traditional bank financing or ABS loans may find themselves vulnerable. This signals the importance of diversifying financing sources and maintaining strong relationships with specialized lenders.

Equipment Manufacturers

The broader implications extend to the equipment manufacturers and dealers.

Equipment loan and lease pools have shown resilience despite economic challenges. However, as delinquencies rise and lenders become more selective, commercial truck manufacturers may need to explore alternative financing partnerships or develop solid internal financing capabilities.

Mitigation Strategies

Successful navigation of the current environment requires proactive approaches from manufacturers, lenders, investors, and borrowers.

For Manufacturers: Seek Industry-Leader Partnerships

Manufacturers of other trucking equipment can increase their sales figures by partnering with trusted lenders. But they should seek out financing partners that are dedicated to the industry, like Mission Financial Services.

For Lenders: Develop More Stringent Evaluation Methods

Current evaluation methods may not adequately capture emerging risks in the equipment financing space. Lenders should start implementing more stringent qualification requirements and potentially adjust pricing to reflect higher risk levels.

For Investors: Focus on Risk Assessment and Portfolio Diversification

Investment is always risky, even with traditionally resilient asset-backed securities. Portfolio diversification can reduce the risks associated with a truck-centric only portfolio.

The constant default rate (CDR) helps investors understand the potential for losses in ABS loans. Investors should pay more attention to risk management based on the CDR.

For Borrowers:

Trucking companies can strengthen their financing positions by maintaining detailed financial records and prioritizing financial management. They should explore specialized financing options designed for their industry’s unique characteristics, such as Mission Financial Services.

The Outlook

The outlook for equipment financing markets depends largely on broader economic challenges and policy responses.

When inflationary pressures moderate and interest rates stabilize, we may see improvement in delinquency rates. However, businesses should prepare for continued volatility and maintain conservative financial management practices.

Moving forward, we expect the equipment financing landscape to evolve as lenders adapt their strategies and borrowers adjust their approaches to capital management. Success will depend on flexibility, preparation, and correctly aligning financing with overall performance and long-term business objectives.

Conclusion

The spike in ABS equipment loan delinquencies during May 2025 demands attention from all equipment financing ecosystem stakeholders.

But most importantly, trucking businesses must practice stronger financial management and find lenders who understand industry-specific challenges. The current environment, while challenging, also creates opportunities for businesses that can demonstrate strong operational performance.

Trucking businesses taking proactive steps to address financing challenges will be better positioned to weather current market conditions. And Mission Financial Services is ready to meet their needs with favorable terms despite broader market constraints.

Contact us for more information on financing options designed to meet the needs of the trucking industry.