The recent U.S. Bank Freight Payment Index, produced quarterly with DAT Freight & Analytics, delivered a number that should get every shipper’s attention: dry van spot rates rose 31.29% year-over-year and 9.74% in a single month. Contract rates climbed too, up 9.00% year-over-year.
Here’s the part that should really get attention: freight volumes didn’t rise to explain it. Spot shipments actually fell, from 1.31 million in April to 1.11 million in May. Rates went up while demand went down.
That divergence is the whole story. This is a supply-driven market, not a demand-driven one. And supply-driven markets behave very differently than the ones most shippers have built their playbooks around.
The Buffer That Disappeared
For years, shippers have relied on a built-in cushion: the gap between contract and spot rates. When disruptions hit, that gap absorbed the shock. A capacity crunch might push spot rates up, but as long as contract rates held steady and the spread stayed wide, the impact on the budget was manageable.
That cushion just got a lot thinner. The index notes that the spread between contract and spot rates narrowed considerably. This compression is eliminating most of the cushion shippers have historically used to manage cost exposure.
Practically, that means routing guide alternatives become less effective as spot rates approach contract levels. A disruption that would have been quietly absorbed by a modest spot premium now lands directly on the budget. Worse, the report flags that contract rates haven’t even fully caught up to spot yet. The lag doesn’t protect shippers — it only delays when the cost arrives.
Why This Is a Supply Story, Not a Demand Story
One detail in the index is particularly telling: linehaul pricing increased more than fuel costs. That rules out the simplest explanation . . . surcharges. It’s all about capacity. Trucks and drivers are getting harder to source at the prices that prevailed a year ago, and that scarcity is repricing the market even as fewer loads move.
The index describes the rate-volume divergence as a clear indicator of a supply-led transition in the market. That distinction matters for planning. A demand-driven spike tends to be self-correcting. Rates rise, capacity responds, things normalize. A supply-driven reset behaves differently. It can persist even as freight activity softens, because the constraint isn’t how much freight is moving, it’s how much capacity is available to move it.
LTL Tells a Different, Equally Important Story
While truckload grabs the headlines, LTL carriers are showing a different kind of discipline. Old Dominion reported first-quarter LTL shipments per day down 7.9% year-over-year, yet revenue per hundredweight excluding fuel rose 4.4%. XPO posted a similar pattern: North American LTL yield excluding fuel up 4.0%, with shipments per day actually rising 3.0%.
In other words, LTL carriers are holding their pricing ground even as volumes soften, a pattern the index attributes to the structural mechanics of LTL pricing (revenue-per-hundredweight frameworks, contract cycles, and freight classification that insulate rates from real-time spot market swings). For shippers moving partial loads, that relative stability is worth factoring into mode strategy right now.
What Shippers Should Do Right Now
The index’s own recommendation is a good starting point: monitor spot-to-contract relationships closely, align routing guides with actual carrier behavior, and stress-test budgets for continued upward pressure in contract pricing. A few ways to put that into practice:
- Revisit routing guides now, not at renewal. If the spot premium your backup carriers were pricing against has shrunk, your tier-two and tier-three options may no longer behave the way they did a year ago.
- Stress-test budgets against continued contract increases. Since spot repriced first and contract is following with a lag, assume more upward movement is coming — even if volumes stay flat or decline.
- Separate surcharge cost from linehaul cost when reviewing carrier invoices. Since this reset is capacity-driven rather than fuel-driven, the line items that matter most have shifted.
- Reassess mode mix. With LTL carriers holding yield discipline and truckload repricing on a tightening supply base, this is a good moment to confirm you’re routing freight to the mode where it actually performs best today, not where it did a year ago.
How a 3PL Helps Weather This Kind of Volatility
Supply-driven rate resets are exactly the environment where a 3PL earns its keep. A few reasons why:
- Diversified carrier networks. A 3PL isn’t relying on a single routing guide built around a handful of contracted carriers. Access to a broader carrier base means more options when primary capacity tightens, and more leverage to find competitive pricing even as the market resets.
- Real-time market visibility. Indexes like this one are released quarterly, but a 3PL with access to live load board and rate data can see the shift happening in real time, well before it shows up in a published report.
- Mode flexibility. As this report shows, truckload and LTL are behaving very differently right now. A 3PL can shift freight between modes (and between contract and spot) as conditions change, something a shipper managing a fixed routing guide internally often can’t do as nimbly.
- Buying power during tight capacity. When the contract-to-spot spread compresses, leverage matters more than ever. A 3PL aggregating volume across many shippers typically secures better rates and more reliable capacity commitments than an individual shipper negotiating alone.
- Continuous routing guide optimization. Instead of revisiting routing guides once a year at contract renewal, a 3PL partner can monitor performance continuously and adjust before a capacity gap turns into a service failure.
The freight market doesn’t have to stay calm for budgets to stay manageable. But it does require active management. Watching the right signals. Adjusting routing guides before they fail. And having the carrier relationships in place to respond when capacity tightens. That’s the work Supply Chain Solutions is built to do.
Supply Chain Solutions helps shippers navigate rate volatility with diversified carrier networks, real-time market intelligence, and routing guide strategies built for changing conditions. Take five minutes to assess the health and resilience of your freight network using our free assessment tool. Or contact us to talk through how we can help protect your freight spend in this environment.
