Rising diesel prices could force more truck capacity out of the freight market in the fourth quarter, according to Corey Klujsza, VP of Pricing and Procurement at RXO. Spot linehaul rates are running more than 40% above year-ago levels, yet the average carrier's operating margin remains far below where it stood at the peak of the last upcycle, leaving the market vulnerable to higher rate volatility. Klujsza said the freight market started Q3 with spot rates inching towards all-time highs around the Fourth of July before cooling, partly due to mini-bid activity that re-rated contract lanes and pulled volume away from the spot market rather than reflecting a genuine demand collapse. He said shippers that took on underpriced lanes in Q1 and Q2 are now being forced to reset those rates, narrowing the spot-to-contract premium, and he expects full 2027 contract bids to reflect double-digit year-over-year increases. One data point offering optimism: the Cass Freight Shipment Index posted its first year-over-year positive print in roughly 40 to 42 months in August, which Klujsza said could indicate shippers are being forced outside dedicated and private fleets, a development that would benefit brokers and spot carriers.
RXO Inc.RXO's own VP warns rising diesel costs could push more truck capacity out of the freight market, tightening supply and raising rate volatility, which cuts both ways for the broker.
