In our Q4 update, the Curve index continued higher into an inflationary market — in Q1, we’re seeing a continuation of that trend.
Though rates may be heading higher, for most logistics professionals the truckload market hasn’t felt too different (at least not yet).
But the market is heating up — what does that mean for shippers and carriers? Will the back half of 2025 actually bring volatility to the market, or will it be a repeat of 2024?
We’ll tell you everything you need to know in the latest truckload market guide.
Q1 Truckload Market:
The Complete Guide for Logistics Pros
What you’ll learn in this comprehensive update:
- Q4 2024 truckload market recap
- Macroeconomic outlook
- Trucking trends
- Q1 2025 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.
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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 full-truckload freight broker in North America, we’ll have an even broader, richer dataset to analyze. We look forward to bringing you more freight market content in 2025.
Q4 2024 Spot & Contract Trucking Rate Recap
In Q4, the Curve continued its upward climb, in-line with our prediction. Freight market conditions tightened to their highest level in over two years.
Specifically, we saw tender rejections and load-to-truck ratios spike, driven by continued carrier exits, impacts from Hurricanes Helene and Milton, and typical holiday shipping seasonality.
Q4 truckload spot rates continued their inflationary rise
Truckload spot rates increased 11.6% year-over-year at the end of Q4, up from 5.8% in Q3.
Q4 truckload contract rates were still deflationary, but trended up
Truckload contract rates* decreased 1.5% year-over-year, a moderation from the 3.4% year-over-year decline in Q3 2024.
Contract rates usually lag spot rates by two to three quarters, so this typical for this point in the cycle. We can see that recent spot market activity is starting to pull up contract rates too.
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Actual Spot Truckload Rates vs. Year-Over-Year
To build further confidence in the Curve (a year-over-year 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 of daily shipments over the last 18 years.
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After remaining essentially flat for the better part of two years, we finally saw our all-in index start to climb, largely driven by seasonality. Despite the muted 2024 peak season, during the week of Christmas, the RXO network saw its biggest increase since Christmas of 2022.
However, we’ve seen this before over the past two years: a holiday or major shipping event causes a temporary spike in the spot market, but it ends up being a blip on the radar, and rates return to their previous baseline.
In previous truckload market cycles, when shipping events hit during the upswing to inflation, they tend to accelerate market activity. The real question moving forward: is carrier supply and shipper demand now balanced to the point where we’ll see a sustained push upwards? Early indicators in Q1 show that, though the baseline is higher, a steep ramp upwards is unlikely.
That said, it is also unlikely that rates will recede. Looking at the all-in index, in absolute terms, carriers are getting similar spot rates to those they saw eleven 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 (i.e., driver pool reduction and/or trucking companies leaving the market), it’s likely we’ll continue to see this index head upwards in the coming quarters.
Q4 2024 Truckload Market: Key Takeaways
- The Curve (measuring year-over-year in linehaul spot rates, excluding fuel) continued its upward climb for the seventh straight quarter, and all-in rates (actual amount paid to carriers) rose too, driven by peak season shipping amidst a shrinking carrier market.
- Though we headed higher into an inflationary rate environment, and there was rate and capacity volatility around the holidays, Q4 was still primarily a shippers’ market.
- Carriers remained under significant cost pressure, while shippers enjoyed relatively high tender acceptance rates, easy capacity and slight rate decreases in their RFPs.
State of the Industry: Macroeconomic Overview
The truckload market remains soft, but the U.S. economy remains reasonably healthy — unemployment is low and several key indicators are moving higher.
Though the U.S. economy is expected to grow again in 2024, it also has to contend with a few major uncertainties, specifically: inflation and interest rates, tariffs and trade policy, and their impact on consumer confidence.
Inflation & Interest Rates
While inflation eased considerably over the past two years, core inflation remains high.
Specifically, the core Consumer Price Index (CPI), which excludes volatile food and energy costs, increased by 3.3% year-over-year in the latest update, above both market expectations and the Federal Reserve’s 2% target rate.
Additionally, the recent changes in U.S. trade policy (i.e., tariffs) have the potential to further increase inflation. Consumers are expecting tariffs to drive inflation — recently, these concerns drove consumer confidence to a seven-month low (according to the University of Michigan).
So what is The Federal Reserve doing? After multiple rate cuts in 2024, they are sitting tight for now. The Fed has a dual mandate of promoting both price stability and maximum employment. Until inflation begins to ease, or a major change in the labor market, additional interest rate cuts are unlikely until later in the year.
Industrial Demand
The industrial sector of the U.S. economy is beginning to show signs of improvement.
The Manufacturing Purchasing Manager’s Index (PMI) entered into expansionary territory for the first time since October 2022.
The New Orders component of the Manufacturing PMI — one of the strongest leading indicators for U.S. economic activity — has improved for five consecutive months.
While this bodes well for the industrial economy, it is unclear how much of this improvement is due to an increase in economic confidence, and how much is due companies pulling shipments forward in anticipation of tariff implementation.
Key Economic Indicators Driving the Truckload Market
Now that we’ve covered the broader economy, let’s that are most closely linked to truckload market activity.
Overall, we’ve seen relative stagnation in these indicators, perpetuating the trend of muted truckload volumes, which have in turn 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.
While we’ve had more than two years of persistent inflation and fears of 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 Q4 2024, the Personal Consumption Expenditures index is at 5.7% year-over-year, up slightly from 5.3% in Q3.
Expectations for a recession remain low, but consumers are putting big-ticket purchases on hold while continuing to prioritize spending on services.
When COVID struck, service-related industries closed and, in turn, demand for physical goods (which required more freight shipping) soared to 15-year highs in an incredibly short period of time, driving a commensurately high inflationary spot market.
Over the past several years post-COVID, U.S. consumers have increased their preference for services (vacations, dining, entertainment, etc.), which has decreased physical goods’ share of wallet, resulting in less freight.
The percentage of total spending on goods has stabilized, and recently increased, but the average goods share is still tracking below the baseline average (32%) of the 2010’s. 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 Q4 2024, the index sits at -0.2% Y/Y, up slightly from Q3.
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 Q4 at 5.7% Y/Y, down slightly from Q3 (7.0% Y/Y), but still growing.
Though the full impact of tariffs is still shaping up, they could certainly be a headwind to continued import growth. Furthermore, continued consumer preference of services over goods could also have a dampening effect to import growth.
Inventory-to-Sales (through November)
- 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 peaking at 1.40 in December 2022, the index has trended down slightly, staying between 1.36 and 1.39 for every month since. Through November (the most recent data available), the index is sitting at 1.37.
With the index remaining stable for the past two years, the post-COVID destocking efforts were successful, and we’re back in a more normative restocking cycle.
To that point, inventory positions at the largest U.S. retailers have continued to grow at a slower rate than their revenue, a sign that shippers are once again more comfortable with a “just in time” inventory strategy.
Given recent supply chain stability combined with consumer preference for the service economy, retailers have been reluctant to build up significant inventory levels like they did in 2022 and 2023.
Macroeconomy & the Truckload Market: Key Takeaways
- Despite continued headwinds over the past two years, the U.S. economy seems to have avoided a recession.
- Overall, not much has changed since Q3 — most indices were relatively flat, though leading indicators in the manufacturing and industrial sectors are encouraging.
- However, there is still significant uncertainty with persistent inflation, interest rate outlook, tariffs and trade policy, and declining consumer confidence.
- 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.
Truckload Market Trends to Watch in Q1 2025
We have climbed out of the trough of the truckload market cycle and are heading higher into year-over-year rate inflation.
Let’s unpack a few of the key trends impacting the market before we dive into the updated Q1 forecast.
1. Spot and contract rates are still comparable (for now).
For the past few years, shippers have used their transportation RFPs as opportunities to bring their contract rates (aka primary rates) back towards pre-pandemic levels.
And they were largely successful — we have seen the longest stretch of discounted spot rates compared to contract rates in history, lasting over two-and-a-half years.
Even though spot rates have already bounced off the bottom, many companies are still trying to get in one last round of reductions.
Those rates and routing guides set in the softer market of 2024 may not survive a tighter market later in 2025, when the spot market will (likely) become more lucrative than the contract market.
We’ve already seen that in year-over-year terms, and have started to see it in absolute terms over the holiday shipping season, which created some tension across routing guides as carriers looked to move more drivers into the spot market.
We’ll see a higher climb into rate inflation if/when spot rates hold a sustained premium over contract rates.
2. Private fleets are still soaking up for-hire freight.
In an effort to combat the unprecedented volatility of 2020 and 2021, shippers made a move to create or expand their private fleets.
This added a lot of resilience in the form of guaranteed capacity and predictable rates, but with the overall downturn in freight volumes, there has been a lot of slack in the line.
For the past few years, this excess private fleet capacity has soaked up a lot of freight that would have otherwise hit the for-hire spot market, prolonging the down cycle.
Spot rate growth will be muted and soft freight market conditions will prevail until shipping volumes meaningfully increase, shippers wind down their private fleets, or (most likely) the for-hire trucking market continues to shrink.
3. Carriers continue to buy less trucks.
After remaining positive for six consecutive quarters (despite spot rates dropping for over a year), in Q4 2023, the bottom finally fell out for truck orders.
Q4 2024 was another continuation of the trend, as U.S. class 8 tractor sales (as tracked by ACT Research) were down -12% on a year-over-year basis.
This is another indicator showing the financial strain on the supply base from the prolonged soft freight market — carriers have caught up to COVID-era backlogs, and the need for incremental capacity, or the ability to turn over old equipment, is lessening.
While there are signs for optimism heading into 2025, for the time being, carriers are holding off on expanding fleets until there is additional clarity on market conditions.
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4. Carrier employment continues to wane.
Throughout most of 2023 and into 2024, driver employment figures remained curiously strong, despite weaker market conditions.
As freight volumes dropped, many drivers flocked to the security of larger fleets, which were more exposed to lucrative contract freight.
As these drivers shifted from owner-operators (who don’t show up in payroll data) to W2 employees at fleets, it boosted employment data from the Bureau of Labor Statistics (BLS) even though the actual amount of capacity in the market was either flat or down.
Throughout 2024, we saw carrier attrition show up in employment numbers, and continue to see more attrition into 2025.
All Employees, Truck Transportation (from the BLS, through December 2024)
- Decreased sequentially for six of the past twelve months, including two of the last three
- Decreased year-over-year in 11 out of 12 months in 2024
(Production & Non-Supervisory Employees, Long-Distance Trucking (aka Drivers, from the BLS, through August)
- Decreased sequentially for four of the past five months
- Decreased year-over-year in 11 out of 12 months in 2024
Operating Authorities (from the FMCSA)
- There was a net decrease of over 3,000 operating authorities in Q4
- The population has declined in 25 of the last 27 months, leading to a total decrease of over 50,000 operating authorities over that time frame (for context, there were around 100,000 additions from 2020 to 2022)
- During the fourth quarter of 2024, the challenging market environment resulted in a few of the highest weekly exit rates of carriers seen in 2024
- Absent a market recovery, elevated insurance premiums and continued cost inflation will likely lead to continued carrier exits over the coming months
Truckload Trends: Key Takeaways
- Not much has changed since Q3: Freight volumes are sluggish (though ticking up slightly), contract and spot rates are comparable (though spot rates ran at a premium during peak season), carriers are buying fewer trucks, and carrier attrition in employment and authority revocations continues.
- The speed and severity of the upward climb will depend on if we get an increase in freight demand, how fast carrier capacity exits the market, or a combination of the two.
- With a continued difficult landscape for carriers, and (in many cases) decreasing 2025 contract rates setting in, it could set the stage for a pick up later in 2025.
Q1 2025 Truckload Market Forecast
We’ve covered the macroeconomic environment, and key trends — but where does it leave us going forward?
We predict the Curve will continue its move into inflationary territory.
Though capacity and rates might feel stable, we are in a changing environment; the market is more balanced than it has been relative to the last few years.
We continue to see carrier capacity leave the market (albeit somewhat slowly). Though 2025 contract rates are trending up and likely to finish Q1 year-over-year in inflationary territory, spot rates are likely to rise at a faster rate. This divergence will drive volatility as cash-strapped carriers look to increase profitability after a very difficult two years.
All that said, while we are in an inflationary rate environment, we don’t anticipate the sort of extreme conditions we experienced in the last inflationary market in 2020 and 2021.
Based on recent history and current market dynamics (shrinking but still available capacity, stable demand), it’s quite possible we’ll see a lower potential market peak; for guidance, a look back to 2014 would likely be a better comparison.
We may still get a more traditional peak if we experience any combination of an increase in demand, a faster-than-expected exit of carriers, or a spike in diesel, but we think a conservative outlook more likely.
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Procurement Tips for a Tightening Truckload Market
Don’t be too aggressive in rate cutting.
Though tempting, be prudent about where you cut rates and trim capacity — we believe the end of 2025 will look different than 2024. Short-term gains today could cost you in the spot market tomorrow.
Keep core freight providers in the game.
Even if you have limited volume and need for them now, if you think you’ll need them in a tight market, keep them engaged in your routing guide. Now is the time to maximize planning and communication with the vendors you care about most.
Q1 2025 Forecast: Key Takeaways
- We are in an inflationary spot market as carrier attrition continues and spot rates overtake contract rates. This dynamic will create pressure for shippers in the coming months.
- Q1 will not likely feel like a dramatically different operating environment, , which is typical given seasonality, but we are in a changing marketplace that is setting us up for a more meaningful flip later in the year.
Next Steps: Get Your KPIs in Order With New Research
Did you know that 99% of carriers take shippers KPI expectations into account before agreeing to move a load with them?
As we head deeper into an inflationary market, it’s the perfect time to check yours up against industry standards.
We recently published the 2025 edition of our original, independent research study on logistics KPIs, and it’s loaded with insights and benchmarks, informed by 1,000 shippers and carriers.
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