Elevated fuel prices, tight capacity and peak-season fees are pushing freight rates to historic highs, according to the fourth-quarter 2026 TD Cowen/AFS Freight Index released Tuesday.
The index projects the highest truckload rates since the first quarter of 2022, less-than-truckload (LTL) rates more than 80% above the January 2018 baseline for the first time, and record-high ground and express parcel costs.
Fuel is expected to keep transportation costs elevated for the foreseeable future, said AFS Logistics CEO Andy Dyer. With inventories low and refineries running at capacity, Dyer said diesel and jet fuel supplies need time to catch up even if crude oil prices fall.
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Capacity is the other major force. Dyer added, “The holiday rush always places a seasonal premium on parcel capacity, while the continued ascent of truckload rates is the result of steady demand chasing a shrinking pool of trucks.”
Following three consecutive quarters of contraction, the U.S. commercial trucking sector rebounded in Q3, welcoming close to 10,000 new prospective fleets and over 229,000 units of verified equipment, according to the RigDig database. New vehicles drove the primary growth within the U.S. trucking sector during the quarter ending last month.
Truckload rates projected to hit highest level in four years
A year ago, truckload rates were still waiting for relief from nearly three years of excess capacity. The rate per mile index has since climbed from 7.6% in Q4 2025 to 19.7% above the January 2018 baseline in Q3 2026. AFS projects 23.4% in Q4, up 14.7% year over year and the highest reading since early 2022.
Though tight capacity has pushed up prices, TD Cowen/AFS Freight Index pointed out that a demand-side catalyst is still missing. U.S. gross domestic product grew 2.2% in the second quarter, but the growth was mostly in services and investments, rather than goods that need to be hauled.
On the supply side, AFS pointed to regulatory enforcement taking drivers off the road and closing training locations, which could indicate that capacity won’t rebound at the historical replacement rate.
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LTL rates climb as tonnage falls
The LTL industry is expected to see strong pricing momentum.
Although decreasing shipment weights continue to pressure cost per shipment in the third quarter, accelerated general rate increases implemented midyear and elevated fuel surcharges pushed costs higher. Disciplined pricing and persistent high fuel costs are expected to sustain this trend, making Q4 2026 the third consecutive quarter to set a record. The LTL rate-per-pound index is projected to reach 82.5% above its January 2018 baseline, an 8.8% year-over-year increase and the first quarterly reading on record to exceed 80%.
“Underlying LTL demand remained soft in 2026,” said Mich Fabriga, vice president of LTL pricing for AFS Logistics, noting that national carriers have reported mid-single-digit tonnage declines.
“But through the combination of spiking fuel prices and a sustained commitment by carriers to prioritizing only profitable loads that fit their networks, LTL pricing has remained exceptionally strong," Fabriga said.
Fuel costs have been a key driver of LTL pricing, with AFS reporting that fuel surcharges rose 79% year over year in September amid a sharp rise in diesel prices.
Parcel shipping costs pushed by peak season
The index points to the rest of 2026 as the most expensive parcel shipping year on record, with holiday demand, fuel surcharges and peak-season fees adding financial strain.
Ground parcel rates are projected to reach 43.3% above the 2018 baseline in Q4, a 5.8% increase year over year. Express parcel rates are expected to hit a record for the fifth straight quarter at 20.3%, up 13.8% from a year ago.
According to AFS, parcel carriers have increasingly modified their fuel surcharge structures to keep fees high, even when fuel prices fall.
Parcel fuel surcharges climbed from 7.75% in Q1 2021 to 30% in September 2026, when diesel prices hit $6.53 per gallon. AFS estimates that 72% of that rise is the product of carrier adjustments to fuel surcharge tables, rather than an increase in fuel costs alone.
“While diesel and jet fuel are major costs for ground and express parcel, the fuel surcharge has become a revenue lever for carriers in addition to a pass-through mechanism for covering the cost of doing business,” said Mingshu Bates, chief analytics officer and president of parcel, AFS Logistics.
“Even if crude oil normalizes and fuel prices recede, the effective fuel surcharge will not show a material decrease,” Bates said.
Peak season brings additional strain, Bates noted, as shippers spend the year balancing volume across carriers to preserve access to capacity and limit demand surcharges that penalize volume above established baselines.
