In our last quarterly update, the Curve index finally crossed the threshold, and we entered into an inflationary market — this ended the fifth market cycle (in our observed history) and kicked off the sixth.
While we may be back in an inflationary environment, it doesn’t exactly feel like it (at least not yet) for most logistics professionals.
What does that mean for shippers and carriers? Will 2025 actually bring back volatility to the market, or will it be a repeat of 2024?
We’ll tell you everything you need to know about the past quarter and what to expect throughout the rest of Q4 and beyond in the latest truckload market guide.
Q3 Truckload Market:
The Complete Guide for Logistics Pros
- Q3 trucking spot & contract rate recap
- Economic outlook: indicators that drive freight demand
- Trucking trends impacting the market
- Q4 truckload market forecast
New to the Curve?
These essential truckload market resources will give you foundational industry knowledge and teach you how how we build our proprietary spot rate index.
RXO & the Curve
RXO acquired Coyote Logistics in September, 2024. As a new, combined company, we will not only continue publishing industry-leading insights (like the Curve) — we plan on making them even better. Now, as the now third largest 3PL in North America, we’ll have an even broader, richer dataset to analyze. We look forward to bringing you improved content in 2025.
Q3 2024 Spot & Contract Trucking Rate Recap
In Q3, the Curve continued its upward climb into Y/Y inflation, in-line with our prediction.
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Q3 truckload spot rates continued their inflationary rise
Truckload spot rates finished Q3 at 5.8% Y/Y, up from 3.0% in Q2.
Q3 truckload contract rates trended down
Truckload contract rates* trended downwards to -3.4%, a dip from -2.7% Y/Y in Q2 2024.
Looking at previous cycles, trend lines are rarely linear, and kinks are common. Furthermore, contract rates usually lag spot rate activity by two to three quarters, so this slight downturn is still in-line with past performance. We expect contract rates to continue their upwards climb in the following quarters.
Looking at previous cycles, trend lines are rarely linear, and kinks are common. Furthermore, contract rates usually lag spot rate activity by two to three quarters, so this slight downturn is still in-line with past performance. We expect contract rates to continue their upwards climb in the following quarters.
Actual Spot Truckload Rates vs. Y/Y
To build further confidence in the Curve (a Y/Y spot rate index), let’s see it up against our proprietary all-in cost-per-mile index — this is comparing annual change (without fuel) versus the actual rate (all-in cost, with fuel included).
(As a reminder, these numbers are informed by real transactional data from thousands daily shipments spanning over 17 years.)
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If you feel like the market has been stagnant, you’re not wrong — our all-in index has remained essentially flat for most of the past two years.
Even recent major shipping events (Labor Day, a short-lived port strike, back-to-back hurricanes) failed to drive a major change.
In previous truckload market cycles, when shipping events hit during the upswing to inflation, they tend to accelerate market activity. Though we observed a slight rate bump and some regional volatility, we failed to see a sustained push upwards.
The cost-per-mile index may have found the bottom, but it’s still only hovering around levels from the 2014 peak.
That means, in absolute terms, carriers are currently getting similar spot rates to nine years ago, though their operating costs (diesel, insurance, labor, etc.) have increased substantially. Simply put, there is no room for rates to drop, as many carriers have been running at unsustainable levels.
With continued attrition in the carrier market, it’s likely we’ll continue to see this index head up as well in the coming quarters.
Q3 2024 Truckload Market Recap
The Curve (measuring Y/Y change in spot rates) continued its upward climb for the sixth straight quarter, though all-in rates (actual amount paid to carriers) remained relatively flat (and have since early 2023).
Though we headed higher into an inflationary rate environment, Q3 was still primarily a shippers’ market, and major events (hurricanes, holidays) had little impact to rates as a whole.
Carriers remained under significant cost pressure, while shippers enjoyed high tender acceptance, easy capacity and slight rate decreases in their RFPs.
Key Economic Indicators Driving the Truckload Market
Through Q3 2024, the economy isn’t receding, but it isn’t roaring back either.
This relative stagnation across macroeconomic indicators means depressed truckload volumes, which have slowed down a freight market recovery.
It’s worth noting that though the truckload market is linked to what happens in the wider economy, it is not always coupled (see the inflationary Curve in 2008 during the Great Recession).
Given how supply and demand work in the truckload market, it’s possible for the economy to remain strong and the truckload market to languish (and vice versa).
Let’s examine the most recent available figures for industrial production, consumer spending, imports and inventories through the lens of how they are impacting truckload shipping.
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Personal Consumption Expenditures
- What is it?
How much the American consumer is spending - How it impacts truckload shipping:
The more we buy, the more we need to produce (IP) and/or buy elsewhere (imports), which translates to greater demand for truckload shipping.
Throughout persistent inflation and fears over a possible recession, consumer spending has remained stable, helping to buoy the overall economy. Though the rate of growth has steadily slowed since Q4 2021, it is still growing — through Q3 2024, PCE is at 5.3% Y/Y, up slightly from 5.2% in Q1.
However, it’s worth noting the balance between physical goods consumption and services. When COVID struck, service-related industries closed and demand for physical goods soared to 15-year highs in an incredibly short period of time, driving a corresponding inflationary spot market.
Over the past several years post-COVID, consumers are spending more money on services (vacations, dining, entertainment, etc.), decreasing physical goods’ share. While overall spending on goods was up 2.8% Y/Y in Q3, spending on services increased even more (6.9% Y/Y), and the good’s share of total spending continued to decline.
We’ll look for any increase in this to drive more freight demand in the coming months.
Industrial Production (IP)
- What is it?
Total value of physical goods America is producing - How it impacts truckload shipping:
The more we make, the more freight that needs to move, from raw material inputs to finished goods
Though IP, like consumer spending, has trended downwards for several quarters, it is still stable. Through Q3 2024, the index sits at -0.4% Y/Y, down slightly from Q2.
While we don’t anticipate a large uptick in production (that would increase overall truckload volumes), as long as it remains stable, demand is not very likely to decrease either.
Imports (Goods Only)
- What is it?
Total value of physical goods America is buying from other countries - How it impacts truckload shipping:
The more we buy from other countries, the more freight that needs to move, from raw material inputs to finished goods
Imports (of goods, excluding services) ended Q3 at 7.0% Y/Y. The slight uptick in imports are encouraging signs for increased freight later in the year.
It’s also possible that we’ll see a short-term spike in imports in the coming quarter, as international shippers try to pull in more inventory ahead of any potential tariff-related and/or potential port strike volatility.
Inventory-to-Sales (through August)
- What is it?
The ratio of physical goods businesses have in stock vs. how much they’re selling - How it impacts truckload shipping:
When inventory levels are high, it creates a delay in demand for truckload shipping, as businesses will work off excess inventory before producing new goods (IP) or buying more goods (imports).
After pandemic-related supply chain disruptions wrought havoc to shippers’ inventories, many began to stockpile in an effort to combat volatility and meet demand.
Throughout 2023, many businesses tried to shed inventory amidst falling demand and rising interest costs.
After peaking at 1.40 in December 2022, the index has trended down slightly, staying between 1.36 and 1.39 for every month since then — through August (most recent available), the index is sitting at 1.38.
With the index remaining stable for the past year, it’s likely the inventory destocking efforts were successful. There are also signs that some restocking has been underway over the past couple quarters leading up to Q4 shipping.
Macroeconomic Takeaway
Nothing much has changed since Q2 — all the major indices are essentially flat, with a slight increase in imports being the exception.Despite continued headwinds over the past year, the U.S. economy seems to have stubbornly avoided a recession.
Though we are still clawing out of a freight recession, the truckload cycle will continue its course.
The last time the cycle went inflationary (2020 – 2021), incremental freight demand drove rate growth. For this inflationary leg, the macroeconomic outlook still doesn’t support a massive spike in demand.
Instead, supply-side constraints (carrier attrition) will likely be the driving force.
