Truckload rates rise as capacity tightens despite soft freight demand

Truckload pricing is experiencing a significant upward shift driven by tightening capacity rather than a recovery in freight demand. In May, dry van spot rates surged over 30% year-over-year, while contract rates followed with a 9% increase. This supply-led adjustment is narrowing the gap between spot and contract pricing, signaling a broader reset in transportation costs for the freight sector.

The truckload market is seeing a sharp increase in pricing, with dry van spot rates reaching $2.14 per mile in May, representing a 31.3% jump from the previous year and a nearly 10% increase from April. Contract rates have also climbed to $2.18 per mile, a 9% year-over-year increase, while fuel surcharges have risen to 73 cents per mile. This pricing surge is characterized as a supply-led adjustment rather than a demand-driven recovery, as freight volumes remain under pressure while truck capacity continues to tighten. Researchers note that spot markets led this repricing transition, with contract rates now following the upward trend.

A critical shift in the market is the significant narrowing of the premium that contract rates typically hold over spot rates, which has compressed from approximately 39 cents per mile to just 11 cents. Alex Terry, director of transportation at Veritiv, warns that this compression leaves shippers with less protection from future rate increases and growing exposure to higher transportation spend. The report suggests that cost per mile can continue to rise in a muted demand environment when supply discipline and capacity tightening are the main drivers. This signals a broader reset in trucking prices as the industry moves through a cycle where costs tell a different story than stable volume data.

The report also highlights a continued divergence between the truckload and less-than-truckload (LTL) sectors, where LTL carriers are maintaining strict pricing discipline despite mixed shipment volumes. For example, Old Dominion Freight Line reported that first-quarter LTL shipments per day declined 7.9% year-over-year, yet revenue per hundredweight excluding fuel increased by 4.4%. XPO similarly reported a 4% increase in North American LTL yield alongside a 3% increase in daily shipments. These figures suggest that shippers should prepare for continued upward pressure on transportation costs even if freight volumes remain relatively flat, as supply discipline remains the primary driver of pricing behavior.