Elevated fuel prices caused by the Iran conflict continue to be the most disruptive near-term force in transportation, driving up all-in rates, according to a report.
Surcharges adjusted to the higher national average, with contract-heavy shippers seeing the most immediate impact, said David Spencer, vice president of market intelligence at Arrive Logistics, in the company’s March 2026 Market Update report.
Linehaul rates appeared to soften during this period, but that was largely because spot rates simply hadn’t caught up to the fuel spike yet. “The result is an environment where shippers are paying elevated contract rates while spot-reliant carriers are absorbing higher upfront costs and often waiting weeks for reimbursement as rates adjust more slowly,” Spencer noted.
[RELATED: Current run on diesel prices affects fleets differently than 2022 spike]
Average diesel prices rose to $5.375 per gallon during the most recent week ending March 23—up 30 cents compared to a week ago—according to the Energy Information Administration. Last week also saw spot market rates trending higher, based on all-in averages from Truckstop.com and FTR, extending a streak of gains driven by cost pressures.
Trucking companies in the spot market may face greater financial strain as diesel prices rise, unlike carriers protected by fuel surcharge agreements, according to Jason Miller, professor of supply chain management at the Eli Broad College of Business at Michigan State University.
As a rough benchmark, Miller noted every $1 rise in diesel prices typically translates to about $0.20 per mile in additional fuel surcharges. This implies that the recent price movement would add approximately $0.06 per mile to carrier surcharge costs.
“For contract freight, shippers will absorb most of these higher diesel costs through higher freight rates. For freight priced on an all-in basis (e.g., most spot truckload rates), carriers end up absorbing much of the higher diesel prices by making less profit,” Miller said.
Uber Freight’s Q1 Market Update report noted the long-term risk of putting financial pressure on smaller carriers and owner-operators who lack the protection of a formal fuel surcharge agreement. In addition, sustained high diesel prices historically drive carrier exits and bankruptcies, further tightening market capacity. In Canada, Uber Freight reported that April crude futures briefly topped $100 per barrel, driving fuel indices more than 20% higher in a single week, spiking fuel-surcharge invoices, and increasing spot-market volatility.
Capacity and supply tightening
Carriers dependent on the spot market are feeling the squeeze alongside factors such as high operating costs, a shrinking driver pool, and ongoing regulatory enforcement to limit capacity. This tightening is expected to intensify as seasonal demand picks up through April and May, Arrive’s report noted.
If fuel price increases stay elevated, Spencer said, “Spot rates will continue to rise to offset carrier costs, or financial strain will accelerate capacity attrition, both of which will contribute to tighter supply conditions.”
Meanwhile, stronger contract rates backed by fuel surcharge protections may encourage better shipper compliance with routing guides. On the equipment side, order activity has improved but not beyond replacement levels, “meaning supply is unlikely to expand enough to meet any near-term demand growth or market volatility that may materialize in the coming months.”
Uber Freight’s report pointed out supply-side concerns regarding the FMCSA’s non-domiciled rule, which is projected to remove approximately 194,000 drivers from the market. While the agency initially expected all affected CDLs to be removed within two years, it now expects a timeline of five years, with roughly 40,000 carriers exiting the market annually.
The report also noted that first-tender acceptance has fallen to around 85%, down from last year’s 92%, signaling tighter capacity and elevated shipper costs.
"Pressure is building at a critical time for the freight market," Spencer noted. Demand signals are mixed overall, but spot market activity continues to outpace year-ago levels. Produce season demand is drawing down reefer availability across South Texas, Florida, and California. In addition, flatbed capacity is tightening as construction, lawn, and garden seasons pick up alongside post-storm recovery volume. These variables, Spencer said, pose supply risks to the market in the coming months, along with high operating costs and regulatory pressure.
