Truckload spot rates to continue upward trend, RXO says

The overall trajectory for truckload spot rates remains “inflationary,” but trade policy presents a significant wild card, according to a report issued by freight broker RXO on Thursday.

The Charlotte, North Carolina-based company’s Curve quarterly forecast said the TL market “has remained relatively calm” with spot rates continuing to step higher despite disruption from rapidly changing tariff policies. A trend – largely in place since 2023 – of soft freight demand, reductions in carrier capacity and stable rates continued in the first quarter.

RXO’s (NYSE: RXO) data showed TL spot rates (excluding fuel) were up 9.1% year over year in the first quarter, which compared to an 11.6% growth rate during the fourth quarter. The company’s all-in spot rate index, which includes fuel, also increased slightly again in the first quarter as it did in the fourth.

The data showed contractual rates increased 1.4% y/y in the first quarter – the first y/y increase since the end of 2022.

The 3PL classified the first quarter as “still primarily a shippers’ market” as “carriers remained under significant cost pressure, while shippers enjoyed relatively high tender acceptance rates, easy capacity and slight rate decreases in their RFPs.”

RXO is the third-largest TL broker in North America following its acquisition of Coyote Logistics last year.

“We’re as close to equilibrium, in terms of carrier supply and shipper demand, as we’ve been in over two years,” the update said. “Relatively speaking, the capacity situation is much more fragile than at this time last year. With a continued difficult landscape for carriers, and (in many cases) decreasing 2025 contract rates setting in, it could set the stage for volatility later in 2025.”

Market tightening during the fourth quarter held into January before unwinding in February and March as tariff rhetoric accelerated. RXO pointed to an 11-week period on the platform at the end of last year when spot rates were at a premium to contract rates, which is typically a sign of recovery. However, into the second quarter, it said spot rates are at a 5% to 8% discount to contract rates.

RXO doesn’t believe the step down in the y/y spot rate increases during the first quarter is a sign the TL market is weakening, noting significant cost pressures on carriers. It said the average cost to operate a truck is 34% higher over the past decade but absolute spot rates are largely the same as they were in 2014.

“Though the spot market has receded since January, it did the same thing in 2024, then continued to build momentum (albeit gradually) throughout the rest of the year,” the update said. “Simply put, it is difficult for freight rates to drop materially, as many carriers have been running with unsustainable unit economics.”