Freight dealer RXO mentioned Wednesday that its truckload spot price index reached a four-year excessive within the first quarter, with expectations for additional will increase within the second quarter. Even with solely tepid freight demand, capability attrition stemming from stricter regulatory oversight of the motive force pool is pushing charges materially greater.
RXO’s (NYSE: RXO) Curve Report confirmed TL spot charges have been up 16.5% 12 months over 12 months within the first quarter after logging a 5.2% development price within the fourth quarter. (The dataset captures linehaul charges, excluding gasoline surcharges.) This was the best development price because the 2021 third quarter.
The quarterly outlook requires the index to file a bigger development price through the second quarter.
“Q1 is often the slowest delivery season of the 12 months, but industry-wide tender rejections have been at their highest ranges since 2022 and price volatility outpaced seasonality,” the report mentioned. “That development continues in Q2, and as regular summer season delivery seasonality hits, it isn’t more likely to decelerate anytime quickly.”
The Charlotte, North Carolina-based firm mentioned contract charges have been up 2.4% y/y within the first quarter. Elevated spot charges are bleeding by way of to contractual price negotiations.
“Nonetheless, with spot charges constantly outpacing seasonal baselines, shippers are bracing for a extremely altered freight atmosphere heading into the busy summer season months and the second half of 2026.”
Public carriers raised full-year contract price expectations through the first-quarter earnings season. Many have been anticipating low- to mid-single-digit price will increase coming into the 12 months, however now imagine market dynamics help will increase within the mid- to high-single digits. Some carriers additionally flagged the probability of double-digit price hikes for transactional-oriented prospects that performed the spot market through the downturn.
J.B. Hunt (NASDAQ: JBHT) mentioned at an investor convention final week that it believes contract charges (non-dedicated) will climb 20% over the following two years as heightened regulation and better gasoline prices purge low-cost operators from the market.
“We’re seeing important linehaul and contract price will increase, regardless of muted shipper demand,” mentioned Jared Weisfeld, chief technique officer at RXO. “Carriers stay below immense price stress, pushed by growing labor bills, the next price of capital, insurance coverage premiums, and, in fact, diesel costs. … If there’s any uptick in delivery volumes, charges will rise at an excellent quicker tempo.”
RXO ups Q2 outlook
A Tuesday replace from the corporate mentioned it was “profitable accretive spot alternatives,” and that it expects gross revenue per load (TL) to exceed regular seasonal traits, coming in “no less than flat” with April. (It beforehand guided to a decline in gross revenue per load throughout Might.)
Spot hundreds accounted for the next proportion of RXO’s TL volumes within the first two weeks of Might when in comparison with April. Whole TL volumes in April have been off roughly 2% y/y, however “outperformed relative to the market.”
“Final week, market circumstances tightened even additional, exacerbated by CVSA Worldwide Roadcheck,” Weisfeld mentioned within the Tuesday replace. “RXO stayed near our prospects and gained important spot alternatives, serving to to greater than offset the squeeze on our contractual e-book of enterprise.”
Extra BigRig articles by Todd Maiden:
- TL linehaul charges surge in April, Cass says
- J.B. Hunt sees TL charges climbing 20% over subsequent 2 years
- FedEx board approves spinoff of LTL unit
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