With emissions standards evolving, the potential for tariffs materializing and costs rising across the board, transportation companies are currently grappling with a unique mix of economic pressure and regulatory uncertainty. Given this environment, many fleet owners and operators are reevaluating their strategies entirely in response to market conditions. Dardan Mehmeti, Equipment Finance Specialist at PNC Bank, has observed that lenders are having more conversations with companies about how to navigate this challenging environment — especially when it comes to equipment financing decisions. Here are strategies that could help navigate the top concerns affecting borrowers in the transportation sector.
The Hybrid Path
Economic uncertainty has many companies in a holding pattern, prioritizing replacement purchases over fleet expansion. Companies are holding onto their assets longer or purchasing pre-owned equipment to tide them over while they get a better handle on the future of the economy.
The potential for stricter emissions rules starting in 2027 contributes to the inclination to adopt a "wait-and-see" approach, as companies decide whether to invest in engine technologies now or wait for more clarity from the Environmental Protection Agency (EPA). Some companies are splitting the difference, upgrading part of their fleets with both gas and zero-emission vehicles, while delaying other investments.
That said, some companies may be accelerating new truck purchases to lock in lower costs as a hedge against price hikes expected in the coming months.
Shifting Expectations
Many companies are also feeling the heat from tariffs, inflation and rising insurance premiums. This can make any equipment purchase feel risky — especially for companies that delayed purchasing during the interest rate hikes of 2023.
Nevertheless, some borrowers have simply adjusted expectations and are moving forward with purchases anyway — accepting higher price tags and interest rates as the new normal. When new equipment is necessary to meet operational needs and keep up with competitors, the benefits of moving quickly can outweigh the difficulties of absorbing higher costs. Moving quickly with necessary investments can often be the best strategy to ensure long-term success.
Repaved Tax Benefits
Tax strategies drive many financing decisions, but upgrades to taxation policy are leaving companies feeling optimistic about moving forward financing new equipment.
With bonus depreciation currently having no sunset provisions in sight for new or used equipment purchased in the year of 2025, businesses are looking to capitalize before anything changes.
Smaller businesses and organizations still have the Section 179 deduction for savings on qualifying equipment.
Alternative Routes
Combatting rising costs is critical for companies to thrive as they assess their need for new equipment. To reduce costs, Mehmeti said, some companies are evaluating insurance alternatives to seek out lower premiums. Others are investing in their own maintenance facilities or generating extra revenue by renting out storage space.
GTS Transportation in Burr Ridge, Illinois, a PNC customer, credits the bank with helping the company navigate a challenging marketplace. To manage rising operating costs and increased competition from small carriers, the company has restructured operations, implemented granular expense tracking and eliminated unprofitable routes and teams.
“Our longstanding relationship with PNC has been defined by consistent support throughout volatile and high-risk periods in the transportation market,” the company shared. “Their reliability and deep understanding of industry cycles have made them a trusted financial institution during both periods of growth and times of stagnation.”
Finding the Right Solutions
PNC offers a range of real solutions — including equipment loans, Terminal Rental Adjustment Clause (TRAC) leases, and Fair Market Value (FMV) leases. While traditional financing continues to be the most common choice, particularly for equipment like tractors and trailers, it’s not a one-size-fits-all. “A TRAC lease can offer better cash flow flexibility for some businesses. We often recommend that clients discuss these options with their CPAs,” Mehmeti said.
At the end of the day, it’s about finding the right balance between transparency, flexibility and smart financial strategy. The right financing provider can deliver not only funds, but insight and tailored solutions that make a meaningful difference.
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