How steady are contract charges?

Chart of the Week:  Van Contract Charges, Nationwide Truckload Index (linehaul price much less gasoline over $1.20/gal) – USA SONAR: VCRPM1.USA, NTIL12.USA

Lengthy-term (contract) charges for dry van truckload transportation (VCRPM1) have remained basically flat over the previous 12 months, rising roughly 1% since July 2024. Quick-term spot charges  (NTIL12) that are naturally extra risky, have risen about 4% over the identical interval. With all of the speak about capability leaving the market at alarming charges, what does this stability in contract charges imply for 2026?

Within the quick time period, the reply is probably going nothing. Contracts are unlikely to maneuver greater quickly, as there’s presently no significant strain on them. Tender rejection charges stay inside acceptable ranges for many shippers, and whereas spot charges are much less dependable, they proceed to supply deep reductions for these prepared to pursue them.

Seasonal strain will enhance over the subsequent few months as the vacation transport season ramps up, nevertheless it’s tough to see this translating into robust or sustained will increase in contract charges. Demand stays extraordinarily weak, with little proof of enchancment past hypothesis. There may be, nevertheless, one necessary caveat.

Final week’s chart article illustrated that capability seems to be exiting the market quicker than demand is declining—one thing with little to no historic precedent over an prolonged interval. The first motive is that this freight recession has lasted longer than any within the fashionable period.

Within the chart above, each price strains drop sharply by way of most of 2022. The faster-moving spot price hit a ground in Might 2023, whereas contract charges discovered a softer backside in 2024.

Though spot charges have been rising since 2023, they continue to be largely unprofitable. Contract charges have been extra resilient, suggesting they’re presently close to the bottom sustainable ranges for many carriers.

The most recent American Transportation Analysis Institute (ATRI) report on provider prices helps this, exhibiting that common working prices elevated 33% from 2019 to 2024. The contract price index (VCRPM1) is roughly 16% greater than its 2019 stage—which means the price of working has risen twice as quick because the charges the market has been prepared to pay.

Moreover, latest regulatory actions focusing on non-domiciled and undocumented drivers have intensified. U.S. Division of Transportation Secretary Sean Duffy just lately acknowledged that he plans to crack down on “CDL mills” and the fleets that use them.

This elevated regulatory strain, which started within the spring, has solely just lately begun to have an effect on the speed surroundings. Spot charges spiked unseasonably in early October amid experiences that immigrant drivers had been avoiding the roads as a result of stepped-up ICE enforcement.

All of this provides to an already difficult working surroundings and may put shippers on excessive alert over the subsequent 12 months. Trucking demand has collapsed over the previous 12 months, but rejection and spot charges have remained resilient.

This dynamic means that if demand returns — and even stabilizes — the market might shortly flip, pushing long-term charges greater once more. Shippers ought to give attention to the standard of their provider companions relatively than simply price financial savings, because the charges negotiated as we speak are prone to change into outdated earlier than the subsequent bid cycle in late 2026.

The FreightWaves Chart of the Week is a chart choice from SONAR that gives an attention-grabbing information level to explain the state of the freight markets. A chart is chosen from 1000’s of potential charts on SONAR to assist contributors visualize the freight market in actual time. Every week a Market Professional will submit a chart, together with commentary, dwell on the entrance web page. After that, the Chart of the Week will likely be archived on FreightWaves.com for future reference.

SONAR aggregates information from tons of of sources, presenting the information in charts and maps and offering commentary on what freight market consultants wish to know in regards to the business in actual time.

The FreightWaves information science and product groups are releasing new datasets every week and enhancing the shopper expertise.

The submit How steady are contract charges? appeared first on FreightWaves.

Chart of the Week:  Van Contract Charges, Nationwide Truckload Index (linehaul price much less gasoline over $1.20/gal) – USA SONAR: VCRPM1.USA, NTIL12.USA

Lengthy-term (contract) charges for dry van truckload transportation (VCRPM1) have remained basically flat over the previous 12 months, rising roughly 1% since July 2024. Quick-term spot charges  (NTIL12) that are naturally extra risky, have risen about 4% over the identical interval. With all of the speak about capability leaving the market at alarming charges, what does this stability in contract charges imply for 2026?

Within the quick time period, the reply is probably going nothing. Contracts are unlikely to maneuver greater quickly, as there’s presently no significant strain on them. Tender rejection charges stay inside acceptable ranges for many shippers, and whereas spot charges are much less dependable, they proceed to supply deep reductions for these prepared to pursue them.

Seasonal strain will enhance over the subsequent few months as the vacation transport season ramps up, nevertheless it’s tough to see this translating into robust or sustained will increase in contract charges. Demand stays extraordinarily weak, with little proof of enchancment past hypothesis. There may be, nevertheless, one necessary caveat.

Final week’s chart article illustrated that capability seems to be exiting the market quicker than demand is declining—one thing with little to no historic precedent over an prolonged interval. The first motive is that this freight recession has lasted longer than any within the fashionable period.

Within the chart above, each price strains drop sharply by way of most of 2022. The faster-moving spot price hit a ground in Might 2023, whereas contract charges discovered a softer backside in 2024.

Though spot charges have been rising since 2023, they continue to be largely unprofitable. Contract charges have been extra resilient, suggesting they’re presently close to the bottom sustainable ranges for many carriers.

The most recent American Transportation Analysis Institute (ATRI) report on provider prices helps this, exhibiting that common working prices elevated 33% from 2019 to 2024. The contract price index (VCRPM1) is roughly 16% greater than its 2019 stage—which means the price of working has risen twice as quick because the charges the market has been prepared to pay.

Moreover, latest regulatory actions focusing on non-domiciled and undocumented drivers have intensified. U.S. Division of Transportation Secretary Sean Duffy just lately acknowledged that he plans to crack down on “CDL mills” and the fleets that use them.

This elevated regulatory strain, which started within the spring, has solely just lately begun to have an effect on the speed surroundings. Spot charges spiked unseasonably in early October amid experiences that immigrant drivers had been avoiding the roads as a result of stepped-up ICE enforcement.

All of this provides to an already difficult working surroundings and may put shippers on excessive alert over the subsequent 12 months. Trucking demand has collapsed over the previous 12 months, but rejection and spot charges have remained resilient.

This dynamic means that if demand returns — and even stabilizes — the market might shortly flip, pushing long-term charges greater once more. Shippers ought to give attention to the standard of their provider companions relatively than simply price financial savings, because the charges negotiated as we speak are prone to change into outdated earlier than the subsequent bid cycle in late 2026.

The FreightWaves Chart of the Week is a chart choice from SONAR that gives an attention-grabbing information level to explain the state of the freight markets. A chart is chosen from 1000’s of potential charts on SONAR to assist contributors visualize the freight market in actual time. Every week a Market Professional will submit a chart, together with commentary, dwell on the entrance web page. After that, the Chart of the Week will likely be archived on FreightWaves.com for future reference.

SONAR aggregates information from tons of of sources, presenting the information in charts and maps and offering commentary on what freight market consultants wish to know in regards to the business in actual time.

The FreightWaves information science and product groups are releasing new datasets every week and enhancing the shopper expertise.

The submit How steady are contract charges? appeared first on FreightWaves.