Knight-Swift says shippers already seeking peak-season capacity

Knight-Swift Transportation anticipates significant contractual rate hikes during the current and upcoming bid cycles as the freight market emerges from a nearly four-year downturn. Strict regulatory enforcement and the recent fuel price shock are driving non-compliant and underperforming operators out of the market.

Even without a notable pickup in demand, supply constraints have been severe enough to force shippers to contemplate realignment with asset-based carriers providing meaningful scale. The Phoenix-based company’s CEO, Adam Miller, told analysts on a Wednesday quarterly call that mini-bid activity is increasing as shipper routing guides fail.

He said some carriers are no longer honoring rates negotiated just one or two months ago and that some of its customers are already looking to lock up peak-season capacity.

After capturing mid-single-digit contractual rate increases in its truckload business to start the year, the company is now eyeing high-single- to low-double-digit increases on the remaining 70% of its book. “I don’t think we’ve ever really seen the pressure on capacity … coming from regulatory forces versus just normal economics,” Miller said.

“I think we could see more capacity coming out of the network than we typically would see in a cycle, and I feel like that could be a catalyst to really drive a strong bid season this year [and] also into next year.” SONAR: Outbound Tender Rejection Index (OTRI. USA) for 2026 (blue shaded area), 2025 (yellow line), 2024 (green line) and 2023 (pink line).

A proxy for truck capacity, the tender rejection index shows the number of loads being rejected by carriers. Current tender rejections show a tightened truckload market. To learn more about SONAR, click here. SONAR: Van Contract Rate Per Mile Index (VCRPM1. USA) for 2026 (blue shaded area), 2025 (yellow line), 2024 (green line) and 2023 (pink line).

The index shows a 7-day moving average of the initial reporting of dry van rate contract rates (without fuel or accessorial charges). Knight-Swift (NYSE: KNX) reported a headline net loss of $1. 3 million, or 1 cent per share, for the first quarter.

Adjusted earnings per share of 9 cents were in line with the negative earnings revision the company provided last week. Analysts were expecting adjusted EPS of 25 cents heading into earnings season. window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {googletag.

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push(function() {googletag. display('div-gpt-ad-1709668545404-0'); }); Adjusted EPS included several nonrecurring items. Headwinds included: 8 cents per share from a negative less-than-truckload claim development, 5 to 6 cents per share from weather and fuel headwinds, and 2 cents per share from an adverse value-added-tax ruling in its Mexico business.

A roughly $8 million decline in net interest expense largely offset a similar decline in gains on equipment sales during the period. The company reiterated its second-quarter adjusted EPS guidance range of 45 to 49 cents, which it also provided last week. Table: Knight-Swift’s key performance indicators – Consolidated U. S.

Xpress fleet appears to be right-sized Truckload revenue was flat y/y at $1. 05 billion, excluding fuel surcharges. A 4% increase in revenue per tractor offset a 4% decline in average tractors in service. The company has culled the fleet count over the past several quarters to improve asset utilization. Loaded miles per tractor improved 2.

3% in the period, with revenue per loaded mile (excluding fuel) increasing 1. 6%. The segment booked a 96. 3% adjusted operating ratio (inverse of operating margin), which was 70 basis points worse y/y. Inclement weather and surging fuel costs were among the headwinds. The bulk of the tractor drawdown occurred at the U. S.

Xpress fleet, which Knight-Swift acquired in 2023. Total annual revenue at U. S. Xpress is roughly $1. 7 billion currently, down from $2. 2 billion in 2022, which had the benefit of the tail-end of the upcycle. The actions were taken to improve freight mix and margins. U. S.

Xpress is closing the gap to the legacy Knight and Swift fleets, operating at a margin that lagged by 300 bps in the quarter. The TL unit typically operates at a mid-80s OR in a normal market. Roughly 70% of its assets are currently operating in one-way and over-the-road configurations, which Miller said are the most levered to an upcycle.

True spot exposure in the business has increased a couple of percentage points to a low- to mid-teens range. The midpoint of management’s second-quarter guidance implies a 93. 1% adjusted OR. Table: Knight-Swift’s key performance indicators – TL LTL could get back to double-digit