Weak Freight Demand Triggers Thousands of Job Cuts Across Logistics and Manufacturing

U.S. logistics, manufacturing, and supply chain firms have started 2026 with a surge of layoffs, facility closures, and bankruptcy filings that underscore the industry's ongoing struggle with weak demand, excess capacity, and tighter credit conditions.

According to FreightWaves, state notices and court records show job cuts affecting more than 2,200 workers nationwide in early 2026 alone. The cuts span rail support services, parcel networks, food manufacturing, packaging, last-mile delivery, and e-commerce.

These layoffs follow a brutal year for the freight industry. According to Layoffs.fyi data, more than 123,000 tech workers lost their jobs in 2025 as companies doubled down on AI investments, while manufacturing and logistics sectors faced their own restructuring pressures.

Which Companies Have Announced the Largest Cuts?

RailCrew Xpress — More Than 400 Jobs

RailCrew Xpress, a Kansas City–based transportation company that shuttles railroad crews between job sites, is laying off more than 400 employees across multiple states after losing a major contract with CSX.

The layoffs affect workers in Virginia, Georgia, and Florida, with additional office closures planned in North Carolina where at least eight locations are slated to shut down. Founded in 2005, RailCrew Xpress operates in roughly 25 states and employed about 2,000 workers prior to the cuts.

Alton Steel — 253 Jobs

Alton Steel Inc. announced it would cease operations effective the week of January 26, 2026, after nearly 25 years of steel production in Alton, Illinois.

The privately held steelmaker cited "insurmountable challenges" — including aging infrastructure, intense market competition, and industry consolidation — that made continuing the business "economically unsustainable."

"This is an incredibly painful decision for everyone involved," CEO Chris Ervin said in a statement. "As a privately held company, we cannot access the capital required to compete with larger, publicly traded competitors that have newer facilities and modern equipment."

The closure impacts approximately 253 employees, plus contractors and vendors. Roughly 200 employees are represented by United Steel Workers Local 3643. The abrupt closure shocked local officials — state legislators noted that just weeks earlier, Alton Steel was actively hiring with no indication the facility was at risk.

Continental Tire — 235 Jobs

German tire giant Continental Tire of the Americas is closing its Aldora Mills textile plant in Barnesville, Georgia, by the end of 2026, eliminating 235 jobs.

The facility, which Continental acquired in 1988, produces textile reinforcement materials including tire cord fabric, hose yarn, and knitted fabric used in tires and the company's ContiTech unit.

Continental cited "ongoing changes in global market dynamics and supply chains," noting the plant "has not been cost competitive for many years despite continuous turnaround efforts."

The company emphasized the closure wouldn't diminish its commitment to the U.S. market, pointing to $1.5 billion in tire manufacturing investments over the past decade and facilities in South Carolina, Illinois, Mississippi, and Indiana that produce 16 million tires per year.

UPS — 128 Jobs (Montgomery, Alabama)

United Parcel Service is closing a distribution facility in Montgomery, Alabama, resulting in 128 layoffs beginning February 2. The closure is part of broader network changes as UPS restructures operations and reduces its U.S. physical footprint.

AVI Food Systems — 297 Jobs

AVI Food Systems plans to lay off 297 employees in Philadelphia as part of a facility closure, according to state WARN filings. The layoffs take effect February 1 and impact workers at locations suggesting the job losses are tied to large institutional foodservice operations at hospitals, universities, and convention centers.

Kroehler Furniture — 275 Jobs

Kroehler Furniture Co. permanently closed its Conover, North Carolina, manufacturing facility on December 31, resulting in the layoff of more than 275 employees.

What's Driving the Freight Industry Downturn?

Multiple factors are converging to create what some analysts call the "Great Freight Recession":

Excess capacity: The industry built up significant capacity during the pandemic e-commerce boom, and supply now exceeds demand in many sectors.

Lost contracts: Companies like RailCrew Xpress and Comprehensive Logistics (which laid off 105 workers in Georgia) are cutting jobs after losing major contracts.

Weak consumer demand: Freight volumes have declined as consumers pull back on spending, particularly on goods that require shipping.

Tariff uncertainty: President Trump's tariff policies have created planning challenges for companies dependent on cross-border trade. Kuehne+Nagel explicitly cited tariffs as a factor in its cost-cutting program.

Tighter credit: Rising interest rates have made financing more difficult for capital-intensive logistics operations, contributing to a wave of trucking bankruptcies.

Competition from automation and AI: While not the primary driver, companies are restructuring to invest in automation and AI capabilities, sometimes at the expense of traditional roles.

How Is the Global Freight Industry Responding?

Swiss logistics giant Kuehne+Nagel announced it would cut between 1,000 and 1,500 jobs worldwide — out of a total workforce of 85,000 — as part of a cost-cutting program to save over CHF 200 million ($230 million) per year.

The company reported a 39% drop in net profit in Q3 2025 amid overcapacity and margin pressure in the freight logistics market. CEO Stefan Paul cited "difficult external factors" forcing the company to "increase our efficiency and performance culture sustainably and in the long term."

The job cuts are expected to reduce Kuehne+Nagel's cost base by at least CHF 110 million, with additional measures targeting another CHF 90 million in savings.

Which Sectors Are Hit Hardest?

Automotive Supply Chain

The auto sector continues to shed jobs as electric-vehicle investments collide with weaker consumer demand. According to FreightWaves reporting:

• Ford announced it will lay off all 1,600 employees at its factory in Glendale, Kentucky, as the facility pivots away from EV battery production
• Autokiniton is closing a Detroit stamping plant, cutting 133 jobs
• IAC Alma will eliminate 246 positions in Michigan
• Dana Thermal Products is closing its Auburn Hills facility with 200 layoffs

Agriculture Equipment

Farm equipment manufacturers are struggling as farmers hold off on big-ticket purchases due to weak commodity prices.

CNH Industrial has laid off 373 workers from two manufacturing plants — 198 hourly positions at its Fargo, North Dakota, plant and 175 workers at its Benson, Minnesota, facility. The company also announced "tentative" plans to close its Burlington, Iowa, factory by mid-2026, affecting 350 workers.

CNH reported fourth quarter 2024 sales declines of 31% and 33% in its agriculture and construction divisions, respectively.

Food Manufacturing

Multiple food producers are restructuring:

• Tyson Foods is closing its large beef plant in Lexington, Nebraska, affecting approximately 3,000 workers, and eliminating a shift at its Amarillo, Texas, beef plant, laying off about 1,700 employees
• Leprino Foods plans to close its Lemoore East cheese plant in California, affecting 300 workers
• Saputo Cheese USA will lay off 240 employees in Wisconsin as part of a consolidation plan

E-Commerce and Fulfillment

The pandemic-era boom in e-commerce fulfillment is reversing:

• Kroger is closing three automated fulfillment centers in Wisconsin, Maryland, and Florida, laying off more than 1,000 employees
• The Giant Co. plans to shut down five centralized e-commerce fulfillment centers in Pennsylvania by the end of Q1 2026
• Comprehensive Logistics laid off 105 workers in Georgia after losing a major contract

What's the Outlook for 2026?

Industry observers expect continued turbulence:

Freight volumes remain weak: The Cass Freight Index and other indicators suggest no immediate recovery in shipping demand. According to Tech.co analysis, a drop in freight demand is causing a fundamental shift in how logistics companies stay afloat.

More bankruptcies likely: Several trucking companies have already filed for bankruptcy protection, and tighter credit conditions could push more firms over the edge. The "Great Freight Recession" has been called the longest downturn in trucking history.

Restructuring continues: Companies are using this period to reduce costs, flatten organizations, and invest in technology that may reduce long-term labor needs. The AI in manufacturing market is expected to grow from $7 billion to $35 billion over the next five years, suggesting further automation-related workforce shifts ahead.

Tariff uncertainty persists: Policy shifts around trade could either stabilize or further destabilize freight demand depending on how negotiations unfold. Multiple sources have cited tariffs as a direct factor in logistics layoff decisions.

CNH CEO Gerrit Marx told investors he expects the agricultural equipment industry to "bottom out sometime this year, potentially without a market upturn" — but added it's "still too early to say how long we will remain at that level."

How Are Companies Supporting Affected Workers?

Many companies are providing transition assistance:

Alton Steel announced it would work with state workforce development agencies and local employers, including U.S. Steel facilities in nearby Granite City, to help workers find new positions.

Continental Tire said it would offer "career counselling and access to employment resources" in collaboration with local partners for workers at its closing Georgia facility.

Amazon and other large employers in affected regions are actively hiring for fulfillment and logistics roles, potentially absorbing some displaced workers — though often at different wage levels and with different benefits.

State rapid response teams from workforce development agencies are coordinating services including unemployment filing assistance, resume workshops, and connections to retraining programs.

The Madison County Training and Employment agency in Illinois has already stepped in to help Alton Steel workers navigate career transitions. Director Darlene Ladd said they are working with the Illinois Department of Commerce and Economic Opportunity to provide rapid response services.

People Also Asked

Q: Will freight and logistics jobs recover in 2026?A: Recovery depends on consumer demand, tariff policy clarity, and industry capacity rebalancing. Most analysts expect continued weakness in the first half of 2026, with potential stabilization in late 2026 if economic conditions improve. The Cass Freight Index and manufacturer sentiment surveys will be key indicators to watch.

Q: Are these layoffs concentrated in certain regions?A: Layoffs are spread across multiple states, but certain regions are hit harder. Pennsylvania has emerged as a hotspot for industrial layoffs, with cuts at Great Dane (164 jobs), S&S Activewear (128 jobs), and Anheuser-Busch (151 jobs). The Midwest is heavily affected by agricultural equipment slowdowns, while the Southeast is seeing automotive supply chain cuts.

Q: What support is available for laid-off workers?A: Companies are required under the WARN Act to provide 60 days' notice for mass layoffs affecting 100+ workers. Many companies offer severance packages, outplacement services, and career counseling. State rapid response teams from workforce development agencies are coordinating job placement assistance. Workers should also file for unemployment benefits immediately and explore retraining programs for growing sectors.

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