At A Glance
Delinquencies are rising in the logistics sector. This article explores credit risk trends in transportation and warehousing from Experian’s latest insights.As the U.S. economy continues to recalibrate post-pandemic, the transportation and warehousing segments of the logistics sector are signaling caution. While the broader logistics industry has remained in expansion mode, Experian’s latest Commercial Pulse Report reveals that delinquencies are rising—an early warning of growing risk in two of the economy’s most critical subsectors.
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Below, we explore how sector-specific credit trends, employment data, and market activity are evolving, and what they may mean for lenders, suppliers, and investors as we head into the final quarter of 2025.
Slowing Growth in the Logistics Sector
The U.S. logistics sector has experienced remarkable growth over the past decade. Between 2013 and 2023, the number of private logistics businesses doubled, peaking in Q4 2023. Since then, business formation has slowed, and for the first time in years, the number of logistics firms has declined—down by 2%.
Employment trends echo this slowdown. Between April 2020 and July 2022, logistics employment rose 25%. Since then, growth has nearly stalled, increasing by just 1.5%. This softening suggests that many logistics firms are adjusting operations and tightening resources in response to shifting demand and rising costs.
Inventory Pressure and LMI Performance
The Logistics Managers Index (LMI)—a diffusion index that tracks key logistics components like transportation, inventory, and warehousing—fell to 57.4 in September 2025. While still in expansion territory (above 50), it’s the lowest reading since March, indicating cooling momentum across the sector.
Inventory levels remain elevated, but rising inventory costs are beginning to pressure future planning. Since December 2023, inventory costs have steadily increased. Retailers typically adjust inventory levels in response to cost changes with a lag, meaning elevated costs could soon lead to leaner inventories—potentially pulling the LMI down further.
Warehousing utilization is also up, and prices have followed. As available space tightens, warehousing costs are rising, adding to the financial strain for logistics firms. This dynamic has the potential to further compress margins and reduce cash flow flexibility for small- and mid-sized operators.
Transportation Trends: Warning Signs Ahead
Transportation—a cornerstone of the logistics network—is showing early signs of contraction. Transportation utilization fell to 50 in September, right on the edge of entering contraction territory. A decline in utilization typically leads to an increase in transportation capacity, as seen in the most recent data, and declining transportation prices.
Lower prices benefit shippers but challenge carriers, particularly smaller players who operate on tighter margins. With costs rising across warehousing and inventory management, declining transportation revenue could tip the balance for many firms, increasing financial vulnerability.
Credit Demand and Originations Continue to Fall
Experian’s credit data paints a picture of declining demand for commercial credit within logistics. Since the pandemic, the percentage of monthly credit originations in the logistics sector has dropped sharply—from 4.5% to just 0.5%. This suggests businesses are becoming more cautious about taking on new debt.
Interestingly, while originations have declined, outstanding balances have remained steady, and in warehousing, they’ve even exceeded pre-pandemic levels. This could reflect longer repayment cycles, reduced cash flow, or delayed investment decisions—all potential risk flags.
Trucking: Dominant but at Risk
Within the logistics sector, trucking remains dominant, accounting for 82% of all open commercial credit trades. This segment relies heavily on commercial cards, which now make up 79% of open credit trades. These cards are often the first credit instrument used by new businesses, making them a leading indicator of early-stage credit performance.
While the prevalence of commercial cards reflects flexibility, it also comes with limitations. Lower credit limits and higher interest rates can create challenges during periods of cash flow strain, especially for operators managing fuel, maintenance, and payroll costs.
Rising Delinquencies and Declining Credit Scores
Perhaps the most concerning trend in this month’s report is the increase in late-stage delinquencies within the logistics sector. Since mid-2021, delinquencies have shifted from early-stage (1–30 days past due) to more serious late-stage (91+ days past due) balances.
In August 2025, 1–30 day delinquencies accounted for just 20 basis points of total past-due balances, while late-stage delinquencies accounted for 47 basis points—nearly double the 2019 average. As these deeper delinquencies mount, average commercial credit scores are declining, despite slight improvements earlier in 2024.
This trend is especially critical for lenders and suppliers. A shift toward aged receivables can signal liquidity challenges, operational inefficiencies, or broader sector stress. For businesses operating on thin margins or in highly competitive sub-industries, rising delinquencies could signal a tipping point.
What to Watch Going Forward
The outlook for the logistics sector remains mixed. While growth hasn’t reversed completely, the combination of rising costs, falling credit originations, and growing delinquencies indicates rising risk, particularly in transportation and warehousing.
Stakeholders should closely monitor:
- Changes in LMI component trends
- Late-stage delinquency rates across business segments
- Shifts in credit utilization and origination patterns
- Warehouse pricing and utilization metrics
These signals can offer early insight into shifting risk exposure across commercial portfolios.
Explore More Insights
Experian continues to provide actionable data to help businesses, lenders, and policymakers navigate uncertainty. To access the full Commercial Pulse Report and explore more insights on small business credit and sector-specific performance:
- ✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis.
- ✔ Subscribe to our YouTube channel for regular updates on small business trends.
- ✔ Connect with your Experian account team to explore how data-driven insights can help your business grow.
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The U.S. small business landscape is undergoing a structural transformation — and commercial lenders may need to rethink what a “small business borrower” looks like. According to Experian’s May 26th, 2026 Commercial Pulse Report, new business formations remain at historically elevated levels, averaging approximately 450,000 per month since the pandemic. That pace represents a 54% increase compared to pre-pandemic averages from 2018 and 2019. Watch the Commercial Pulse Update According to Experian’s latest Commercial Pulse Report, new business formations remain at historically elevated levels, averaging approximately 450,000 per month since the pandemic. That pace represents a 54% increase compared to pre-pandemic averages from 2018 and 2019. But perhaps more importantly, the composition of those businesses has changed dramatically. In early 2026, approximately 93% of newly formed businesses were sole proprietorships, up from 85% in 2018. Many of these businesses have no employees, limited operating history, and different borrowing behaviors than the traditional small businesses lenders historically underwrote. That shift is creating a fundamentally different commercial credit environment. A Different Kind of Small Business Owner Historically, many small business lending models were designed around businesses with employees, established operations, recurring revenue streams, and longer credit histories. Today’s wave of new businesses often looks very different. Many newer firms are being launched by individuals pursuing consulting work, freelance opportunities, side businesses, creator-economy income streams, or post-retirement self-employment. These businesses may operate leaner, carry lower fixed costs, and rely more heavily on revolving credit products rather than traditional financing structures. In many cases, the business owner and the business itself are financially intertwined. That evolution matters because underwriting a sole proprietor is not the same as underwriting a mature operating company. The rise in sole proprietorships is being driven by several long-term labor force and demographic trends now reshaping the U.S. economy. Demographic Shifts Are Driving Entrepreneurship One of the most important forces behind the surge in sole proprietorships is the aging U.S. population. By 2050, individuals aged 55 and older are projected to represent nearly 40% of the total U.S. population. At the same time, Americans are increasingly working later in life. Labor force participation among older workers has steadily increased over the past two decades, while participation among younger workers has trended lower. Retirement itself is also evolving. Many retirees are no longer fully exiting the workforce. Instead, they are remaining economically active through part-time consulting, contract work, side businesses, and self-employment arrangements. According to research highlighted in Experian’s report, 59% of workers expect to continue working during retirement, while 61% of recent retirees express interest in continued employment. These trends are contributing to a growing segment of “microbusinesses” — businesses with few or no employees operating primarily around the skills, experience, or services of an individual owner. At the same time, broader workplace dynamics are also influencing entrepreneurial activity. Employee Engagement Is Falling According to Gallup, employee engagement in the U.S. and Canada declined to 31% in 2025, down from post-pandemic highs. Gallup estimates that low engagement costs the global economy nearly $10 trillion in lost productivity. Younger workers in particular appear increasingly affected by workplace stress, burnout, and changing expectations around flexibility and career mobility. As a result, more individuals may be pursuing alternative work arrangements, independent income streams, or self-employment opportunities. The side-hustle economy continues to expand as well. A recent PYMNTS study found that nearly 20% of workers engaged in regular side work during the previous six months. Collectively, these labor force dynamics are reshaping not only how Americans work, but also how small businesses are formed, financed, and evaluated from a credit perspective. Commercial Credit Usage Looks Different Experian data shows meaningful differences in how smaller and larger businesses use commercial credit. Smaller businesses and sole proprietors rely more heavily on commercial credit cards, while larger firms tend to utilize a broader mix of leases, lines of credit, and term loans. Businesses with four or fewer employees received average commercial card credit lines of roughly $8,900 in 2025. By comparison, businesses with more than 100 employees averaged approximately $29,500 in new commercial card credit lines. Even when loan origination rates appear similar across business sizes, loan amounts differ substantially. Businesses with fewer than four employees averaged approximately $119,000 in term loan originations, while larger businesses averaged closer to $268,000. Risk performance differs as well. Larger firms generally continue to demonstrate lower delinquency rates and stronger commercial credit scores, reflecting greater operational scale, more established financial histories, and broader access to capital. Why Risk Models May Need to Evolve For lenders, these shifts present both opportunity and complexity. The surge in new business formation creates potential growth opportunities across commercial credit markets. However, many of today’s borrowers may not fit historical underwriting assumptions. Traditional business risk models often relied heavily on factors associated with mature operating businesses — payroll size, years in business, trade depth, and established commercial borrowing history. Today’s newer firms may instead require a more blended view of risk that incorporates both commercial and consumer-level behaviors, cash flow dynamics, and alternative indicators of financial stability. As sole proprietors and microbusinesses continue to account for a growing share of the small business economy, lenders may need to remain agile in balancing portfolio growth with disciplined underwriting and risk management strategies. The definition of “small business” is evolving — and commercial risk models may need to evolve alongside it. Learn more ✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis. ✔ Subscribe to our YouTube channel for regular updates on small business trends. ✔ Connect with your Experian account team to explore how data-driven insights can help your business grow. Download the Commercial Pulse Report Visit Commercial Insights Hub Related Posts
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