Core Insights - Covenant Logistics Group is experiencing unprecedented bid levels from customers due to concerns over trucking capacity, with bids increasing by 17% since August [1] - The freight industry is facing a significant exit of capacity, influenced by government policy enforcement regarding English language standards, although the full impact is currently obscured by a consumer spending pause and market uncertainty [2] Government Policy Impact - The Trump administration has intensified enforcement on commercial driving, including stricter ID requirements and ineligibility for non-U.S. citizens to obtain Commercial Driver's Licenses (CDLs) [3] - The Federal Motor Carrier Safety Administration has been directed to enhance enforcement of English language proficiency standards among truck drivers, with non-compliance leading to out-of-service violations [4] Market Dynamics - The expected capacity exits are anticipated to help rebalance the trucking market, aligning supply and demand, but may lead to increased procurement costs for Covenant, potentially constraining margins despite customer rate increases [5] - Shippers are proactively seeking bids to secure capacity and mitigate anticipated rate increases in the trucking market for 2026 [6] Rate Trends - Current overcapacity and insufficient freight are keeping contract rates flat, contrary to earlier forecasts of a 2% to 4% increase in contract rates for 2025, with actual increases around 1% due to delays in rate cuts and tariffs [7]