The US trucking market is showing early signs of emerging from a freight downturn that has lasted nearly four years. However, new pressures are now pushing rates upward again — particularly rising diesel costs linked to the ongoing conflict in the Middle East.

Spot trucking rates in the United States have remained elevated in recent weeks, especially across the East Coast and the Midwest, following major disruptions caused by snow and ice storms earlier this year.

Now another factor is strengthening the upward trend: surging fuel prices.

According to the US Energy Information Administration, the average price of diesel jumped 96 cents in a single week ending March 9, marking the largest seven-day increase since the agency began tracking the data in 1994. The previous record was a 75-cent rise in March 2022, following Russia’s invasion of Ukraine.

Diesel prices now average nearly $4.90 per gallon across the United States, while in California they have surpassed $6 per gallon.

For shippers, the immediate consequence is higher fuel surcharges. Industry estimates suggest these surcharges have increased by 15 to 20 cents per mile, pushing long-haul trucking costs higher. Many shippers are expected to see the impact reflected in invoices from brokers and carriers in the coming weeks.

Executives across the trucking sector believe the current conditions could drive higher contract rates, particularly as existing agreements come up for renegotiation.

Some brokers have already begun refusing loads under contracts signed as recently as January 1, arguing that those rates no longer reflect the new cost environment.

“Tender rejections are up 13 to 15%,” said Josh Allen, chief commercial officer at ITS Logistics. “That’s the first rejection. If shippers issued requests for proposals within the last three to six months, many of those contract rates are already underwater.”

Data from the Journal of Commerce indicates that shipper-paid spot trucking rates rose between 15% and 20% year-on-year in February.

However, the increase is not uniform across the country. Rates for freight originating in the Midwest rose by 52 cents per mile between November and February, while shipments originating in the Southwest increased by only 10 cents per mile during the same period.

Capacity tightening across the sector

The tightening of trucking capacity is being driven by several factors.

Some carriers have exited the market following prolonged economic weakness, while new regulatory enforcement measures are also having an impact.

The Trump administration’s crackdown on non-domiciled drivers, combined with proposed rules requiring stronger English language proficiency, are affecting driver availability.

In addition, proposed legislation known as Dalilah’s Law could prohibit states from issuing commercial driver’s licenses (CDLs) to undocumented immigrants and potentially revoke existing licenses.

“For the first time in roughly three years, routing guides are showing signs of disruption,” said Drew Herpich, president and chief operating officer of Nolan Transportation Group.

Many freight contracts currently in place were negotiated during the second half of last year when market conditions were significantly more stable.

As tender rejections increase, more freight is being passed down through a shipper’s routing guide — moving to second- or third-tier carriers or even entering the spot market.

Industry executives also note that carriers are becoming increasingly disciplined about capacity commitments as volumes approach or exceed contracted levels.

“Conversations around contract alignment are occurring across the market,” Herpich said. “The most effective approach has been collaborative discussions with customers to address market shifts and ensure sustainable pricing.”

Allen added that the adjustment process is already underway across the industry.

“A shipper might call and say: you are 12th in line in our routing guide and the other 11 carriers have declined. Would you take the load at these rates?” he said.

At the Raymond James Investor Conference, trucking giant J.B. Hunt Transport Services said the current tightening of capacity resembles the regulatory disruption the industry experienced in 2017 and 2018, when electronic logging device (ELD) rules were introduced.

Nick Hobbs, president of highway services at J.B. Hunt, also pointed to enforcement actions against so-called “CDL mills” — low-quality driver training schools — and “chameleon carriers”, trucking companies that attempt to evade regulatory scrutiny by operating under multiple identities.

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