Why Truckload Rates Are Soaring Despite Falling Demand
Dry van spot rates hit $3.55 per mile in early October, up 50% year-over-year.
Truckload spot rates are climbing sharply, up 50% year-over-year to $3.55 per mile, despite a clear decline in freight demand. The paradox has left shippers and analysts puzzled: why are costs rising when fewer loads are being tendered?
The answer lies not in demand, but in structural constraints and soaring fuel costs. Julie Van de Kamp, a freight market analyst, points to diesel prices as a primary driver. The FreightWaves DTS diesel truck stop price hit $6.39 in early October, a 9.9% increase in just one month. since July (sin mayúscula inicial), diesel has climbed steadily, pushing up operational costs for carriers and, consequently, rates for shippers.
FreightWaves, the data and analytics platform tracking these trends, provides real-time insights into freight markets through its National Truckload Index (NTI). The all-in spot rates on the FreightWaves NTI rose about 4.1% in the past month, reflecting the broader pressure on pricing. This index is widely used by logistics managers to benchmark costs and adjust budgets accordingly.
Yet the demand side tells a different story. Accepted tender volumes have fallen nearly 3% over the past week and are down 9% since mid-September. Compared to June’s peak, volumes have dropped by 20%, and year-over-year trends show they are lagging behind the prior three years. Van de Kamp noted that the mid-September baseline was artificially inflated by a post-Labor Day surge, making the current decline even more pronounced.
Capacity Constraints, Not Demand, Keep Rates Firm: truckload spot rates
Despite softer demand, the truckload market remains tight. Rejection rates, an indicator of carrier willingness to accept loads, peaked at 14.67% in mid-September before easing slightly to 13.79%. While this suggests a cooling market, Van de Kamp argues the level is still consistent with a healthy, non-loose market.
“We are going to continue to see tighter markets based on available capacity, not necessarily based on demand.”
Julie Van de Kamp·Julie Van de Kamp
The barriers to adding new capacity are significant. Fewer CDL schools, challenges in recruiting and retaining qualified drivers, and increasing regulatory burdens have raised the cost and complexity of expanding fleets. The Federal Motor Carrier Safety Administration (FMCSA), the U.S. agency overseeing commercial vehicle safety, has introduced stricter compliance requirements in recent years, further limiting the pace at which new carriers can enter the market.
These regulations, while aimed at improving road safety, have inadvertently tightened capacity by making it harder for smaller operators to scale.
Van de Kamp highlighted that large carriers are prioritizing yield and utilization over fleet growth, while smaller operators face difficulties securing freight. New carrier operating authority filings, often seen as a sign of incoming capacity, are not translating into more trucks on the road.
Many applicants, she suggested, are securing MC and DOT numbers now to age them for future use rather than deploying assets immediately. This trend underscores the cautious approach carriers are taking in an environment where operational costs and regulatory hurdles outweigh the benefits of rapid expansion.
Shippers Pay More for Quality, Not Just Volume
Contract rates are also on the rise. The van contract rate per mile initial reporting index (VCRPM1) reached 270 on September September 17, its highest level since 2022. Van de Kamp attributed this increase not only to fuel costs but also to shippers’ willingness to pay more for driver quality, safety performance, and fraud risk mitigation. These factors, she noted, can push rates higher independently of load volumes.
For shippers, this shift means higher logistics costs even as freight volumes soften. Many are now prioritizing partnerships with carriers that offer reliable service, transparent pricing, and robust safety records. This trend is particularly evident among large retailers and manufacturers, who are increasingly willing to lock in higher contract rates to avoid the volatility of the spot market. The focus on quality over cost alone reflects a broader industry shift toward resilience and risk management in supply chains.
The disconnect between rates and demand is likely to persist. With diesel prices showing no signs of retreat and structural capacity constraints remaining in place, Van de Kamp expects spot rates to hold firm and potentially continue rising in the coming months. For shippers, this means higher costs even as freight volumes soften, a trend that could reshape budgeting and logistics strategies well into 2025. Logistics managers are advised to monitor the FreightWaves NTI and other industry benchmarks to stay ahead of pricing trends and adjust procurement strategies accordingly.
As the market navigates these mixed signals, one thing is clear: the truckload sector is no longer driven solely by demand. Fuel, regulation, and capacity constraints have taken center stage, creating a new dynamic for carriers and shippers alike. The industry’s ability to adapt to these structural challenges will determine whether rates stabilize or continue their upward trajectory in the months ahead.
The current market conditions present both challenges and opportunities. For shippers, the rising cost of freight may necessitate a reevaluation of supply chain strategies, including inventory management, route optimization, and carrier selection. Companies that rely heavily on spot market rates may find themselves at a disadvantage, as the volatility in pricing could strain budgets. Conversely, those with long-term contracts may benefit from greater stability, though they may face higher rates when renewing agreements.
For carriers, the tight capacity environment offers an opportunity to improve yield and profitability. However, the barriers to expanding fleets, such as driver shortages and regulatory costs, mean that growth will likely remain slow. Carriers that invest in driver retention, safety technology, and operational efficiency may gain a competitive edge, particularly as shippers prioritize reliability and performance over cost alone.
Looking ahead, industry stakeholders should keep a close eye on key indicators such as diesel prices, rejection rates, and tender volumes. The FMCSA and other regulatory bodies may also introduce new policies that could further impact capacity and costs. As the market continues to evolve, adaptability will be critical for both shippers and carriers to navigate the shifting landscape of the truckload sector.
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