RXO reports truckload spot rates hit four-year high as regulatory tightening squeezes capacity
Capacity attrition driven by stricter driver oversight and the CVSA International Roadcheck is pushing rates higher despite tepid freight demand, lifting gross profit expectations.
Freight broker RXO has reported that its truckload spot rate index reached a four-year high in the first quarter, with the company forecasting further increases throughout the second quarter. According to the firm’s latest Curve Report, truckload spot rates rose 16.5 per cent year-on-year in the first quarter, marking the strongest growth rate since the third quarter of 2021. This surge occurred despite tepid overall freight demand, as capacity attrition stemming from stricter regulatory oversight of the driver pool continues to push rates materially higher.
The Charlotte, North Carolina-based company noted that tender rejections hit their highest levels since 2022 during the first quarter, a trend that is expected to persist into the summer as normal seasonal shipping patterns take hold. RXO’s chief strategy officer, Jared Weisfeld, highlighted that industry-wide tender rejections outpaced seasonality in the typically slowest shipping period of the year. The report indicated that this volatility is unlikely to slow down, with shippers bracing for a highly altered freight environment heading into the busy summer months and the second half of 2026.
Contract rates also reflected the tightening market, rising 2.4 per cent year-on-year in the first quarter as elevated spot rates began to bleed through to contractual negotiations. Public carriers have revised their expectations upward, with many now anticipating mid- to high-single-digit rate increases, and some flagging the potential for double-digit hikes for transactional customers. J.B. Hunt previously stated at an investor conference that it believes non-dedicated contract rates could climb 20 per cent over the next two years, driven by heightened regulation and higher fuel costs purging low-cost operators from the market.
Market conditions tightened further in late May, exacerbated by the CVSA International Roadcheck. Weisfeld noted that RXO stayed close to its customers and won significant spot opportunities, helping to offset the squeeze on its contractual book of business. The company expects gross profit per load to exceed normal seasonal trends, coming in at least flat with April levels, contradicting previous guidance that anticipated a decline in May. Spot loads accounted for a higher percentage of truckload volumes in the first two weeks of May compared to April.
While total truckload volumes in April were down approximately 2 per cent year-on-year, RXO stated that its performance outperformed the broader market. Weisfeld emphasized that carriers remain under immense cost pressure from increasing labour expenses, a higher cost of capital, insurance premiums, and diesel prices. He warned that if there is any uptick in shipping volumes, rates will rise at an even faster pace, underscoring the structural shifts currently reshaping the logistics sector.
