Here’s what you need to know:
- Spot rates hit their highest level since 2022, and freight demand is still soft.
- Federal policy is the biggest structural shock to carrier supply since trucking deregulation in 1980.
- Spot rates have crossed above contract rates for the first time in three years.
The freight market has reached four-year highs in load-to-truck ratios and tender rejections — not because demand has recovered but because of a dramatic supply-side shock.
“Despite the fact that we’re still in a very soft freight environment, with the Cass Freight Index down about 8% year over year in Q4 2025, and then another 7% year over year in the month of January, we’re reaching these higher freight KPIs given all this capacity that’s come out,” Jared Weisfeld, chief strategy officer at RXO, said in a webinar discussing RXO’s The Curve report – a proprietary index examining indicators driving the market.
Truckload spot rates continued to rise 5.2% year over year in the fourth quarter of 2025, up from 1.8% in Q3 2025. As of February 13, Q1 2026 is pushing even higher at 18.7% year over year – the highest since 2022.
The report noted that spot rates will continue to rise year over year as carrier capacity tightens relative to shipper demand.
On the contract side, rates move from 2.1% in Q3 to 2.4% in Q4 and 3.2% in January, indicating a catch-up dynamic.
Despite improving spot rates, carriers continue to face cost pressures. According to the report, the all-in cost-per-mile index (including fuel) ticked up to 125 in Q4 – its highest reading since Q4 2022. For comparison, during the COVID-era, it peaked at 178.1.
Spot rates have crossed above contract rates after three years, the report noted. “That all changed over the holidays, and through Q1 to date, spot rates have held their advantage, bolstered by enforcement-related capacity attrition and nationwide winter storms.”
The structural supply shock
While capacity exits have accelerated, the most significant driver of the capacity crunch is due to federal enforcement actions, specifically around English language proficiency rules and non-domiciled CDLs.
“The biggest supply shock that we’ve seen is less to do about carrier authorities as opposed to the actual number of drivers available in the ecosystem,” Weisfeld explained. “You can still have an active carrier authority, but because of all the rules associated with English language proficiency and non-domiciled CDLs, the amount of drivers available to that authority could be materially lower.”
However, Weisfeld noted that there are early positive demand signals worth watching, namely the ISM manufacturing new orders rising to 57 in January – the highest in four years; Core CPI has decelerated to the mid-2% range; GDP is forecasted to grow approximately 2.1% in 2026, though goods consumption remains at depressed levels; and the One Big Beautiful Bill is expected to deliver stimulus through bonus depreciation and tax refunds beginning early February 2026.
The market is operating in a fluid environment, the report said, with tariffs and trade policy influencing economic uncertainty and, as a result, declining consumer confidence and long-term inflation expectations.
[Related: Winter weather and strong economy push trucking conditions to best levels since 2022]
Q1 2026 forecast
The Curve index will remain in year-over-year inflationary territory and end Q1 2026 higher than Q4 2025, the report noted. Rates and capacity “may stabilize somewhat by the end of the first quarter, but the lull likely won’t last too long with Roadcheck and produce season right around the corner.”
If capacity trends continue with an improvement in demand, the guide noted that most shippers’ contract rates will likely not be sustainable. “The severity will hinge on stability (or lack thereof) in trade policy and the steepness of the improved demand curve,” it said.
A notable distinction from previous inflationary cycles is that this one is supply driven, compared to the 2020-2021 period where demand influenced rate growth.
The current macroeconomic outlook doesn’t encourage demand boost. “It’s more likely that supply side constraints (carrier attrition) will be the driving force. That said, any increase in demand would drive supply chain volatility.”
