The truckload spot market remained subdued in the third quarter and a modest peak season will likely keep a lid on rate increases in the fourth quarter, freight broker RXO outlined in its quarterly outlook released Thursday. However, the company said increased regulatory action targeting non-compliant CDL holders could tip the scales next year, ushering in “freight rate volatility.”
RXO’s (NYSE: RXO) Curve report showed TL spot rates (excluding fuel) were up just 1.8% year over year in the third quarter – a third consecutive period of slowing rate growth. (The index logged y/y rate increases of 6.5% in the second quarter, 9.1% in the first quarter and 11.6% in the 2024 fourth quarter.) The company’s all-in rate index, which includes fuel, was also just slightly inflationary in the third quarter.
Contract rates were up 2.1% y/y in the period, which was an acceleration from the 1.1% increase recorded in the second quarter.
The Charlotte, North Carolina-based company summed up the third quarter as a period in which “shippers enjoyed relatively high tender acceptance rates, easy capacity and only slight rate increases in their RFPs,” while carriers “remained under significant cost pressure.”
The rate datasets have largely been range bound since the 2023 third quarter, unable to hold any seasonal gains from events like produce season or Roadcheck. Further, while spot rates have rebounded, they have been “unable to consistently overtake contract rates,” which is a hallmark of a TL market upswing.
“The trends we’ve been seeing for much of the past two years continued in the third quarter, including muted freight volumes, waning carrier capacity, and low spot rates that haven’t been able to sustain any significant upward momentum,” said Corey Klujsza, vice president of pricing and procurement at RXO.
However, RXO said TL rates are unlikely to move meaningfully lower as carriers are currently seeing rates similar to 2014 even though their operating costs are up 34% since. Plus, the supply side is continuing to contract, moving the market closer to equilibrium.
SONAR: National Truckload Index (linehaul only – NTIL) for 2025 (blue shaded area), 2024 (green line) and 2023 (pink line). The NTIL is based on an average of booked spot dry van loads from 250,000 lanes. The NTIL is a seven-day moving average of linehaul spot rates excluding fuel. Spot rates have moved below year-ago levels in the fourth quarter even as new constraints on the driver pool (non-domiciled CDL restrictions and English language proficiency requirements) take hold.To learn more about SONAR, click here.
RXO said the market is “already experiencing the first signs of tightening” as regulatory enforcement ramps (non-domiciled CDL restrictions and enhanced English language proficiency requirements). While the legality of the recent rule change is being challenged, RXO said insurance companies may no longer be willing to underwrite coverage for carriers with non-domiciled CDL holders, effectively driving this capacity out of the market.
The crackdown is occurring amid extant carrier attrition due to unsustainable operating economics. Class 8 truck orders remain below typical replacement levels as most for-hire fleets have utilization efficiency initiatives in place. Private fleets, some of which insourced transportation to better control distribution during the pandemic, are cutting back as the cost of truck ownership moves higher.
“The capacity environment is more fragile than at any point over the past two years, and a modest spike in demand and/or the continuation of capacity exits could lead to rate volatility in 2026,” said Jared Weisfeld, chief strategy officer at RXO.
SONAR: Outbound Tender Reject Index for 2025 (blue shaded area), 2024 (green line) and 2023 (pink line). A proxy for truck capacity, the Outbound Tender Reject Index shows the number of loads being rejected by carriers.Current tender rejections are not signaling a recovery.
SONAR: Contract Load Accepted Volume Index for 2025 (blue shaded area), 2024 (green line) and 2023 (pink line). The index measures accepted load volumes moving under contractual agreements. It excludes all rejected tenders. The index remains well below prior-year levels.
The Curve index has started the fourth quarter sequentially lower but is expected to end the period “slightly higher than its current position,” with rates remaining inflationary.
RXO said it’s seeing buy rates with carriers accelerate across the network, but shippers aren’t yet feeling “the squeeze in their routing guides.” With little upside to contract rates available in the spot market, carriers have “little-to-no incentive to jeopardize shipper relationships in a weak demand environment.”
Looking into 2026, the company flagged the potential for the “biggest structural change to the U.S. carrier market since industry deregulation in 1980” as ongoing capacity exits could be amplified by non-domiciled CDL constraints.
“Eventually, spot rates will overtake contract rates, and this divergence will drive volatility as cash-strapped carriers look to increase profitability after a very difficult three years.” But it said the next peak is likely to resemble 2014 and not the boom seen following the pandemic.
“A lot of it will hinge on stability (or lack thereof) in trade policy, the extent to which drivers leave the market, and how shippers and consumers respond,” the report said.
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