M&A cycle aims for stabilization in 2026 after turbulent year

In the past, M&A analysts in the trucking industry expected the year 2025 to be a return to normalcy after a tumultuous period. The industry faced challenges due to the COVID-19 pandemic, low freight rates, and government policies hindering M&A activities. Initially, experts were optimistic as they anticipated a stabilization of factors. Beau McGinnis, now a vice president at Tenney Group specializing in freight industry M&A, expressed a positive outlook, stating that trends were moving in the right direction.

However, the economic landscape took an unexpected turn with the initiation of various government policies under the second Trump administration. The Department of Government Efficiency (DOGE) and increased tariffs threw the industry into a state of uncertainty throughout 2025. This uncertainty led many industry players to exercise caution when considering M&A deals. The impacts of these policies lingered throughout the year, creating risks and affecting the completion of deals that already had long timelines.

Despite the challenges, 2025 saw the completion of significant M&A transactions, including Two Roads’ acquisition of Texas Trans Eastern and the THMAC-Service Transport Co. merger, which garnered attention. While larger carriers were not highly active in the M&A space, smaller carriers engaged in over 550 M&A deals nationwide, with the Southeast region leading in completion numbers.

Looking back, 2025 was a period of adjustment rather than a return to normalcy, according to McGinnis and Tenney Group CEO Spencer Tenney. Companies found themselves focusing on strategic acquisitions and service enhancement to navigate the complex environment. Sellers were motivated by insulating themselves from trade policy risks but encountered many uncertainties due to ongoing changes.

Trade policy emerged as a significant impediment to M&A activity, affecting deal structuring and decision-making. The tariff uncertainties prevalent in 2025 led to a slowdown in M&A activities, as buyers and sellers grappled with underwriting challenges. Tariff volatility added complexity and time-consuming analyses, ultimately stalling anticipated M&A recoveries.

Looking ahead to 2026, there are expectations for increased M&A activities in the transportation and logistics industry, with a major rail merger on the horizon. Large asset-based providers are predicted to explore horizontal integration, while technological advancements are anticipated to drive market movement. However, segment-specific factors, such as high spot rate experience and tech platforms, may either hinder or accelerate M&A activities.

The road ahead suggests a spike in M&A activity in the fourth quarter of 2026, with potential carryover into 2027. McGinnis and Tenney advise industry players to closely monitor market indicators and plan their strategic moves accordingly. For those contemplating M&A deals, understanding market dynamics, identifying gaps, and gauging timing are critical for successful outcomes in the evolving landscape of the trucking industry.