Focus | With an oversupply of trucks and a shortage of cargo, drivers are facing mounting cost pressures—how can the slump in road freight rates be reversed? Industry insiders suggest fostering collaborative governance among governments, the industry, and digital platforms.

Recently, at the China Federation of Logistics and Purchasing’s 2023 second-half road freight market analysis conference, Zhou Zhicheng, Director of the Research Department of the China Federation of Logistics and Purchasing and Secretary-General of the Road Freight Branch, offered the following analysis to the media, including reporters. Since the beginning of this year, despite adjustments to COVID‑19 control policies, the freight industry has yet to see the anticipated improvement in market conditions, and freight rates have not rebounded as the pandemic has receded.

of road freight transport The “prolonged slump in freight rates” is also clearly reflected in the first-half statistics. According to data released in July by the China Federation of Logistics and Purchasing, in June 2023, China’s road logistics freight rate index stood at 102.4 points, down 0.17% from the previous month and 0.32% year on year. Looking at the weekly indices, the first and fourth weeks saw month-on-month declines, while the second and third weeks posted month-on-month gains. Moreover, since January of this year, the road logistics freight rate index has been on a steady downward trend.

In fact, reporters have observed that low road freight rates are not a phenomenon unique to this year; rather, the situation has only worsened in recent months. Many truck drivers report being subjected to price pressure from shippers, intermediaries, and digital platforms, with rates sometimes falling below cost, posing systemic risks to the industry. The persistent slump in freight rates highlights a host of underlying issues, underscoring the urgent need for reforms to break the deadlock. Manbang, Luge, … Digital freight platforms such as G7 have also recognized the issue of low road‑haul rates and are exploring solutions from both a platform‑based and digital perspective.

“At this stage, shippers are strongly inclined toward low‑cost transportation capacity. As companies strive to cut costs, they place demands on the final‑mile delivery segment—seeking both competitive pricing and high‑quality service. Consequently, the market has seen non‑compliant practices aimed at reducing rigid costs, leading to excessive competition; these include gray‑area cost‑cutting measures such as converting dual‑driver setups into single‑driver operations and extending driving hours,” said Zhou Zhicheng.

Zhou Zhicheng noted that, amid such cutthroat competition, road freight transport is also plagued by issues such as overloading and over‑dimensional shipments, which raise the risk profile for truck drivers and drive up their operating costs. “These non‑compliant practices require stricter regulatory oversight and higher penalties for violations, in order to ensure a fair and competitive market environment—this is the issue that the industry is currently most concerned about.”
Supply-demand imbalance has led to industry… “The chaos of involution”

The road freight market operates under a tiered subcontracting structure. From the upstream shippers to the actual carriers, numerous intermediaries—including brokers, freight forwarders, and third-party logistics providers—play key roles. This proliferation of middlemen directly impacts the interests of truck drivers who serve as the frontline carriers.

According to data from G7 Yiliu, freight volumes from January to June this year remained broadly stable compared with last year, but have declined significantly versus two years ago. Overall, the oversupply situation has intensified, while supply-side upgrading continues to face substantial pressure. At present, industry-wide price wars are particularly pronounced, and the imbalance between supply and demand is making it difficult to establish a new equilibrium or support mechanism.

He Hua, General Manager of the North China Region at Shanghai Ze Yi Supply Chain Management Co., Ltd., stated that, in practice, logistics companies are facing steadily rising fulfillment costs, while shippers are continually seeking to cut logistics expenses. Meanwhile, carriers, in an effort to boost volume, resort to cutthroat competition and price‑undercutting to secure business, resulting in chaotic market dynamics. Yet carriers also have operating costs and cannot afford to operate at a loss; consequently, they push overall market prices lower, placing immense pressure on freight‑transport enterprises. Today, with more trucks than cargo, truck drivers’ bargaining power is weak, market prices are relatively transparent, and industry over‑competition further compounds the issue—directly impacting drivers’ incomes.

In addition, to reduce logistics costs, some companies opt to enter into or amend long-term contracts with logistics providers. Such agreements typically require carriers to offer lower rates and longer‑term service commitments. While this may provide cost advantages for the contracting firms, it can depress freight rates across the market. To remain competitive, logistics companies are compelled to cut prices, which in turn drags down overall market rate levels.

Pan Yonggang, director of the Rogo Research Institute, found in earlier surveys that, since the pandemic, companies have imposed far stricter controls on logistics costs than during the outbreak—particularly by curbing unexpected expenses incurred during that period—reflecting a heightened awareness of cost management. At the same time, intense competition within the logistics sector has weakened carriers’ bargaining power.
“Adding capacity while cutting routes” is squeezing demand for medium- and long-haul trucking, further driving freight rates lower.

In addition to the imbalance between supply and demand, there is another underlying reason for the continued decline in road freight rates. At the aforementioned conference, Zhao Nanxi, an engineer at the Research Institute of the Ministry of Transport, specifically pointed out that, based on a three-year analysis, the share of transport carried by medium- and long-distance vehicles has been shrinking, while the share handled by short-distance vehicles has been growing.

“The share of long-haul freight over 500 kilometers has declined by 15%, and that of distances over 200 kilometers has fallen by 7% to 8%; combined, the drop exceeds 20%. Meanwhile, the proportion of shipments within 200 kilometers has risen. As a result, despite overall freight volumes remaining roughly unchanged year over year, the volume of short‑haul shipments has increased while long‑haul volumes have decreased, indicating a shift in the overall mix,” said Zhai Xuehun, Chairman of G7 Yiliu, citing data from the platform.

Zhai Xuehun pointed out that this change occurred within a single year, with very significant shifts taking place from last year to this year. “This shift will lead to an oversupply of long-haul trucking capacity, and this structural change is also weighing on demand, which is why road freight rates have been unable to rise.”

Why has the share of medium- and long-distance transportation declined? Zhai Xuehun identifies two key reasons: First, last year’s pandemic-related lockdowns disrupted inter‑provincial logistics, prompting companies to build more warehouses and reduce cross‑regional trucking, thereby minimizing the hassle of coordinating shipments across regions. Second, in response to evolving marketing strategies—characterized by frequent, small‑batch orders and diversified channels—brands have established numerous forward‑deployed micro‑warehouses and smaller storage facilities. “This reduces the average transportation distance; whereas we used to have 20 warehouses, we now have 80, which shortens the distances traveled.”

The second reason cited by Zhai Xuehun is in the Public Affairs Department of JD Logistics Group ( This has been confirmed by Tian Lin, Senior Director at ESG. Tian Lin stated that the entire express delivery sector—including JD Logistics, the “Three通One达” group, SF Express, and others—is ramping up the construction and strategic placement of delivery outlets and warehouses. By analyzing the geographic distribution of customer orders, these companies are devising cost‑optimal multi‑warehouse allocation plans, reducing cross‑regional shipments, and increasing the share of next‑day delivery services.

Accordingly, to some extent, as brand‑owned warehouses and distribution outlets become more widely dispersed, the distances over which goods are transported have shortened. This has reduced the mileage and transit times of medium- and long‑haul freight vehicles, thereby narrowing their operating space. At the same time, the expansion of warehousing and network coverage has created additional cargo‑handling hubs, making transshipment more efficient. Taken together, these factors help lower transportation costs, which in turn drives down freight rates.
Governments and platforms are working together to address the issue. The dilemma of “high costs and low freight rates”

As can be seen, there are two main reasons behind low freight rates. On the positive side, improvements in industry-wide transport efficiency help reduce costs, thereby lowering transportation prices to some extent—this is a result of healthy competition within the sector. However, on the other hand, oversupply and cutthroat competition can quickly push road freight into a state of disorderly price‑cutting, severely undermining truck owners’ incomes and jeopardizing their livelihoods.

In response, Zhou Zhicheng pointed out that, since the beginning of this year, many leading shippers have been prioritizing supply-chain resilience and security, increasingly favoring low-cost transportation capacity. They seek a balance: low costs, high service quality, and robust safety—yet such a combination is often difficult to achieve under current conditions. He recommended strengthening the accountability framework between supply and demand along the logistics chain. On the one hand, the industry should standardize the rights and obligations of both parties by adopting model contracts; on the other, it should also establish relevant standards and guidelines to more effectively enforce the responsibilities of all stakeholders and enhance shippers’ awareness of their safety‑related obligations.
In addition, digital freight platforms are also making efforts to address low‑price practices. Kong Qingfeng, General Manager of the Public Affairs Department and Director of the Public Policy Research Center at Manbang Group, stated that recently, the Manbang platform has comprehensively upgraded its price‑governance mechanism and launched… “Sharp-Eyed” product. Leveraging big data and advanced algorithms, this solution covers the entire user‑operation value chain, enabling early prediction, rapid identification, intelligent analysis, and automated decision‑making for low‑price shipments. It delivers tailored solutions promptly to shippers and drivers, boosting drivers’ ability to find loads and helping shippers dispatch faster while ensuring smoother logistics operations and maintaining market order.

Data shows that, since the beginning of this year, the Manbang platform has averaged over … in daily blocked and deduplicated freight volume. 40,000 orders, with the heavy‑cargo rate down 30%. Daily order volume triggering low‑price alerts is nearly 50,000, while post‑shipment price optimization generates an average of 30,000 orders per day, achieving a price‑optimization rate of 7.5%.

Zhou Zhicheng stated that to address the current situation of depressed freight rates in the road‑transport sector, it is not enough to rely on timely intervention by platforms; a collaborative governance framework involving government, industry, and platforms must also be established. He recommended that, at the governmental level, a sound, transparent, and predictable system of routine regulation should be put in place, with strengthened cooperation between the government and platforms, optimized regulatory tools, and enhanced regulatory efficiency.

Previously, the China Federation of Logistics and Purchasing conducted a survey on pricing structures, identifying fuel costs, tolls and bridge fees, employee wages, and depreciation as the primary cost components. Consequently, highway tolls remain a significant cost item, and the implementation of differentiated tolling schemes can substantially impact rigid cost dynamics.

On the front of industry co‑governance, Zhou Zhicheng stated that it is essential to fully leverage the pivotal role of associations and other key stakeholders, establish a dialogue mechanism among platform‑related parties, and employ measures such as communication and consultation, standard‑setting, price guidance, and industry self‑regulation to further enhance the ecosystem. Regarding platform self‑governance, it is necessary to rationally formulate operational regulations for platforms and to规范 and constrain the business conduct of platform participants. In particular, efforts should be intensified to improve the regulation of market order, appropriately guide price fluctuations, and develop industry norms and standards.