How this affects you:
- Harder short-term planning amid fuel volatility: Fluctuations in diesel prices and uncertain spot market reactions make near-term forecasting far more difficult.
- Stronger rates driven by tight capacity, not demand: Ongoing equipment shortfalls and regulatory enforcement impacting the driver market are pushing rates higher despite uneven shipment volumes.
- Fuel surcharges inflating rates while demand lags: Much of the recent rate growth is tied to fuel cost recovery rather than true demand.
Swings in fuel costs along with uncertainty on how the spot market will react to diesel prices make the near-term outlook harder to predict.
FTR’s Trucking Conditions Index inched nearly a full point in February compared to the prior month, reaching 10.2 -its strongest in four years- as freight rates continue to strengthen. FTR noted that the record spike in diesel prices in March was a short-term blow for carriers and could push the TCI into negative reading, though preliminary indications point to a slim positive reading due to strong freight rates and capacity utilization.
The TCI tracks five key elements of the U.S. trucking market: freight volumes, freight rates, fleet capacity, fuel prices and financing costs. Positive readings signal favorable conditions, negative readings reflect challenging conditions, and values near zero indicate a neutral environment.
“Extreme volatility in fuel prices –especially with the ceasefire in the Middle East– and uncertainty over how the spot market will respond to falling diesel prices make the near-term truck freight market far more difficult to forecast than the longer-term outlook, which remains solidly favorable for carriers,” said Avery Vise, FTR’s vice president of trucking.
The freight market’s reaction to weather and diesel prices confirms how much capacity has tightened, Vise added.
“The real question is whether freight volume will support an acceleration of freight rates or whether carriers will merely hold recent gains,” he noted.
The truckload sector is seeing rates hit its highest levels since late 2022. While demand remains stable, the Q2 2026 TD Cowen/AFS Freight Index suggests the price hikes are driven by a shrinking pool of carriers.
The index projects truckload rates per mile will reach 10.1% above the 2018 baseline this quarter—the first time the metric has breached the 10% mark in more than three years. Linehaul costs per shipment jumped 10.2% in the first quarter of 2026 alone, a surge that analysts say cannot be explained by distance or demand alone.
Supply constraints, not demand, drive rate gains
The Q2 2026 TD Cowen/AFS Freight Index suggests a supply-side squeeze and aggressive carrier pricing strategies are creating an expensive landscape for shippers across truckload, less-than-truckload (LTL), and parcel sectors.
The surge is headlined by a 50% jump in oil prices in March, fueled by escalating conflict in the Middle East. The report notes that while the broader U.S. economy slowed to 0.5% growth in late 2025, inflation has been reignited, reaching 3.3% as energy costs permeate the supply chain.
"Businesses should brace themselves for a new normal of elevated fuel costs," said Andy Dyer, CEO of AFS Logistics. "The structural causes that spurred this spike take time to unwind, and the related pricing changes, particularly in parcel, tend to be sticky."
Meanwhile, the Cass Transportation Index Report for March 2026 reported that the shipments component fell 4.5% year over year in March, but rose 3.0% month over month.
Cass Freight Index
“Tightness in dry van truckload (TL) conditions is starting to radiate to other markets, so far mainly reefer and flatbed TL, but eventually this tightness will drive demand in LTL and intermodal as well,” said Tim Denoyer, the report’s author and ACT Research vice president and senior analyst.
The less-than-truckload (LTL) sector is also bracing for record costs. The LTL rate per pound index is projected to reach an all-time high of 68.4% above the baseline in the second quarter.
Unlike the truckload sector, LTL is seeing the first signs of a demand recovery, supported by three consecutive months of expansion in U.S. manufacturing.
"Positive signals like expanding manufacturing activity align with positive weight and cost per shipment trends in our data," said Mich Fabriga, Vice President of LTL Pricing at AFS Logistics.
Expenditures rose 4.2% year over year in March, with the improvement driven by the month-over-month shipments. On the rate side, the Cass Truckload Linehaul Index fell 0.5% month over month in March, but was up 1.8% year over year, with downward pressure as capacity recovered from winter weather largely offset by capacity tightening due to higher diesel prices.
“Volumes are beginning to recover, but it is mainly supply constraints supporting higher rates, in our view, as equipment capacity is contracting, and we’ve recently re-entered a driver shortage,” Denoyer said.
Class 8 tractor sales have fallen short of what is needed to sustain fleet size, Denoyer said. “Our survey of medium and large fleets suggests we recently entered a driver shortage, the third in the past decade. The new non-domicile CDL rules took effect in mid-March, and effects of several rule changes are weighing on the driver market. Driver availability is a key component of capacity in the market, and additional scarcity seems likely, supporting higher freight rates.”
Fuel surcharges lead rates higher
That backdrop is reflected in March data from DAT Freight & Analytics, which showed truckload freight volumes rising across all major equipment types. The DAT Truckload Volume Index pointed to strong early-season demand to move retail goods, produce, and construction and industrial equipment. Van volume was up 12% from February, reefer climbed 7%, and flatbed surged 18%.
National average diesel fuel surcharge rose across all equipment types. The average van fuel surcharge leaped from 41 cents to 61 cents per mile. “For context, monthly average van fuel surcharges averaged around 40 cents per mile throughout most of 2025. The March reading represents a 50% increase from that baseline,” said Ken Adamo, DAT Chief of Analytics.
Spot and contract rates reached their highest levels in more than two years, though the gains were mostly driven by fuel cost recovery.
- Spot van rate: $2.52 per mile, up 11 cents from February
- Spot reefer rate: $2.97 per mile, up 9 cents
- Spot flatbed rate: $3.09 per mile, up 37 cents
Contract rates followed suit:
- Contract van rate: $2.72 per mile, up 20 cents from February
- Contract reefer rate: $3.10 per mile, up 22 cents
- Contract flatbed rate: $3.43 per mile, up 30 cents
Notably, van and reefer spot linehaul rates—the portion of the truckload rate excluding fuel—actually declined month over month. Flatbed was the outlier as its average linehaul rate rose 13 cents. “Linehaul rates were still under pressure through most of March, which tells you demand hasn’t fully caught up yet,” said Adamo.
Adamo noted that the smartest players are pricing contracts based on “where they believe the market is going and being transparent about those assumptions, leaving room to adjust if conditions change.”
Experts warn that even if oil prices eventually recede, the sophisticated pricing models adopted by carriers during this period may keep transportation costs elevated for the foreseeable future.
Parcel carriers capitalize on fuel
The TD Cowen/AFS Logistics report accuses major parcel carriers like FedEx and UPS of using fuel surcharges as "potent revenue generators." While the price of diesel rose roughly 10% year-over-year in the first quarter, ground fuel surcharges skyrocketed 26.7%.
The cost of shipping a 5-pound package from Atlanta to New York City has climbed to $31.94, a 41.8% increase since 2022. During that same period, cumulative inflation rose 15.1%.
"Carriers have no reason to stop pulling that lever," said Mingshu Bates, Chief Analytics Officer at AFS Logistics. She noted that even the U.S. Postal Service and Amazon have introduced or proposed fuel-related fees to keep pace with the market.
However, the report highlighted a rare divergence between the two largest private carriers: While UPS is tightening its pricing, FedEx appears to be offering deeper discounts to chase volume, providing some leverage for larger shippers.
