RXO released the latest update to its proprietary Curve truckload market forecast, which shows rapidly rising truckload spot rates, excluding the impacts of fuel.
In the second quarter, spot rates, as measured by the Curve, rose 32.4% year-over-year, up from 16.5% in the first quarter, marking the ninth consecutive inflationary reading.
“In the second quarter, truckload spot rates rose at an even faster pace than in the first quarter and consistently outpaced contract rates, which put increased strain on shippers’ routing guides,” says Corey Klujsza, VP, pricing and procurement at RXO. “That trend is not only continuing but picking up steam as we head into peak season. Though we’ve been in a year-over-year inflationary environment for over two years, the truckload market is starting to feel materially different.”
“Though overall freight volumes remain muted, shippers are still experiencing significant rate volatility due to decreased carrier capacity, as drivers continue to exit the market as a result of federal regulations and enforcement. While rising freight rates have helped carriers offset some of their own inflationary pressures, profitability is still challenged. Carrier operating costs are nearly 30% higher, excluding fuel, when compared to the previous market peak. Any sustained increase in shipping volumes will further strain an already diminished supply base and add more inflationary pressure on rates,” adds Jared Weisfeld, chief strategy officer at RXO.
Key takeaways:
· The continued surge in rates is the result of continued attrition of carrier capacity, driven by federal regulation enforcement, which has led to a supply imbalance relative to demand.
· The index has not experienced this level of rate inflation since pandemic-era surges, with the second quarter hitting both the highest year-over-year reading and largest sequential increase since the second quarter of 2021.
