Transportation and Logistics: Underwriting Through Persistent VolatilityBy Corey Mason, Principal, WhiteHorse Capital

August 26, 2026 – Market sentiment has turned positive in recent quarters across the Transportation and Logistics (“T&L”) industry after a prolonged multi-year freight recession (the longest in modern memory¹). The rebound has been supported by numerous data-points, including the national average dry van spot rate reaching approximately $3.00 per mile in July 2026 compared to roughly $2.00 a year earlier, linehaul rates (excluding fuel) up roughly 47% over the same period, and tender rejections reaching their highest reading since mid-2022.²

Despite the recent positive momentum, volatility is an inherent structural feature of the industry. Freight is largely a commodity service and pricing responds sharply to shifts in supply and demand.

External shocks have amplified this dynamic nearly every year since the pandemic, starting with the Suez blockage (2021), followed by the war in Ukraine (2022), the Panama Canal drought (2023), Red Sea diversions (2024), repeated tariff rounds (2025), and most recently the Iran conflict (2026).

A logical question for any investor approaching the T&L industry is: How do you get comfortable deploying capital into a market where volatility is the baseline, not the exception?

In our experience, the answer is predicated around three simple concepts: (i) deep industry-specific knowledge, as market shocks do not impact every sector equally, (ii) conviction on borrower-level differentiation, and (iii) an appropriately sized capital structure that allows a business to both manage and capitalize on the inevitable market turbulence.

Same Shock, Different Outcomes

The post-COVID boom and subsequent market contraction provides a recent and tangible reminder of these dynamics.

When supply chains seized and capacity dried up between 2020 and 2022, asset-light businesses (brokerages and freight forwarders) benefited first, capturing increased profitability on higher freight rates. Then the market inverted.

Businesses that had grown solely on higher freight rates were hit hardest as pricing normalized and demand softened, with the Cass Linehaul Index whipsawing from 138 in 2019 to a peak of 167 in June 2022 before falling 18% to 137 by September 2024.²

During this period, numerous platforms failed, with the for-hire carrier population contracting ten consecutive quarters beginning in Q4’22 as authority revocations outpaced new entrants.³

The most prominent was Convoy, an asset-light freight broker once valued at $3.8 billion. Convoy shut down operations in October 2023 due to what its Chief Executive described as an “unprecedented freight market collapse” layered on top of tighter capital markets.⁴ The freight market hadn’t collapsed, rather Convoy’s growth was propelled by unsustainable market freight rates, with limited contracted capacity or dedicated networks to defends its pricing position.

While numerous platforms folded, others were able to capitalize on the disruption and a consistent theme emerged: Platforms that successfully navigated the market shock typically had both a differentiated business model limiting price elasticity, contracted demand, and a balance sheet capable of absorbing the swings.

Where We Lean In, and What We Underwrite

WhiteHorse does not attempt to time the freight cycle and has remained an active T&L lender over the past four years, despite the difficult operating environment. We have partnered with owners and sponsors across brokerage, asset-heavy dedicated trucking, warehousing, drayage, intermodal, and freight forwarding.

We believe the characteristics of a quality credit are largely what any investor would expect: a durable competitive moat, scale, diversification, and an established creditworthy customer base.

A more useful question is which risks are we willing to underwrite that often give other lenders pause:

• Customer Concentration: Underwritable when the anchor customers are high-quality, contractually committed, with an entrenched service offering across multiple lanes.
• Geographic or End Market Concentration: A single gateway or market can be financeable when the company has a clear competitive advantage and downside demand can be quantified or range-bound.
• Ramped Earnings: A rapid increase in earnings does not automatically screen out a credit. We have successfully underwritten and structured around outsized growth that aligns equity and lender.
• Asset-Heavy and Capital-Intensive Platforms: These platforms typically provide a specific and defensible service offering to the broader T&L industry when underwritten with the appropriate understanding of true capital requirements.
• Cyclicality: Unavoidable in T&L. WhiteHorse looks to address by sizing leverage and cash flow coverage based on historical sector, end market, and industry troughs.

Built to Lend Through the Cycle

Bank and private debt capacity has historically tightened in volatile markets, at the exact moment sponsors and borrowers are seeking certainty. We believe those situations are where we have had our greatest success as a counterparty willing to do the work on a complicated, cyclical credit, commit to a structure, and close.

WhiteHorse has a long track record across transaction types and structures, including agenting direct loans for both founder-owned and private equity-backed operators and taking selective positions in larger syndicated deals.

Our investment approach is simple and not dictated by the freight cycle and treats T&L market volatility as the baseline. Conditions that often push capital to the sidelines are precisely the circumstances in which we are willing to deploy capital as a long-term financial partner.