A week before the largest U.S. trucking company reports third-quarter earnings, Knight-Swift Transportation CEO David Jackson is preparing investors for the volatility in the industry to hit the company's bottom line.

"The freight environment is difficult. It has been more difficult than people expect from earnings standpoint," Jackson said in an interview, adding he expects other truck and rail stocks to be similarly impacted.

Knight-Swift lowered its earnings guidance for the second half of the year on Tuesday, saying its third-quarter earnings per share will fall between 47 cents and 48 cents, compared with its previous forecast of 54 cents to 57 cents. The company also expects to make less money in the fourth quarter, lowering its earnings outlook to between 62 cents and 65 cents per share, from its previous estimate of between 73 cents and 77 cents per share.

Jackson blamed overcapacity in the industry. Big rig orders hit a record in 2018 as companies and independent truckers ramped up capacity in response to higher rates caused by changes in shipping patterns, partly due to the trade war.

Knight-Swift's average revenue per truck declined 3% in the second quarter, Jackson says more than 90% of the company's business is contract trucking. Knight-Swift's brokerage revenues, where it connect drivers with customers based on the spot market, fell by 10%.