Truckload carriers eyeing multiyear rate upcycle

The truckload market appears poised for a prolonged period of rate hikes, as the upcycle has just gotten underway. A pronounced shift in truck capacity is benefiting large, well-capitalized carriers, while posing significant risks to shippers that failed to foster sustainable partnerships during the multiyear freight recession.

The capacity levers being pulled continue to favor large carriers. It started last year with stricter enforcement of non-domiciled CDL rules and English-language proficiency requirements, and crackdowns on shady driver schools and ELD providers. Capacity constraints have ramped in recent weeks.

Federal authorities are more strictly enforcing cabotage rules and revoking visas. Further, the impact the Supreme Court’s broker liability ruling has on driver vetting and insurance requirements is still being contemplated across the industry.

The net impact from the regulations will purge hundreds of thousands of noncompliant drivers from the industry, analysts contend, allowing carriers operating legally to recoup pricing and restore margins. “This industry is behind,” said Spencer Frazier, executive vice president of sales and marketing at J. B.

Hunt Transport Services (NASDAQ: JBHT), during a Tuesday appearance at a Wells Fargo investor conference in Chicago. “It’s been four years in a cost-inflationary environment and a rate-deflationary environment. The industry is still not healthy.” 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 tight truckload market. To learn more about SONAR, click here.

Frazier said most fleets haven’t generated the returns needed to adequately reinvest in their networks, which has led to a steady drumbeat of carrier bankruptcies. He said that all TL operating expense lines are up roughly 30% to 50% over the past five years while rates have been on the decline.

“So, the industry has a catch-up period from a cost perspective to go through,” Frazier said. He noted driver wage pressure in some markets, which will also have to be recouped through rate negotiations. Management at J. B. Hunt (NASDAQ: JBHT) flagged the likelihood of a cumulative 20% rate hike over the next two years at an investor conference last month.

Most carriers raised bid season expectations during the first-quarter earnings season, which ended in early May. The group had targeted low- to mid-single-digit rate increases entering the year, but a tightening supply side now has it calling for mid- to high-single-digit increases, with some shippers seeing double-digit rate hikes.

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 contract rates without fuel or accessorial charges.

Routing guides are crumbing Contract rates set early in the 2026 bid season aren’t holding, management teams from Schneider National (NYSE: SNDR) and Werner Enterprises (NASDAQ: WERN) said at the Tuesday event. Mini-bid activity has spiked, and some shippers have been forced to rebid their entire book as tender rejections surge.

May brought about another jump in spot rates ahead of and after Roadcheck. SONAR: National Truckload Index (linehaul only – NTIL. USA) for 2026 (blue shaded area), 2025 (yellow line), 2024 (green line) and 2023 (pink line). The NTIL is based on an average of booked spot dry van loads from 250,000 lanes.

The NTIL is a seven-day moving average of linehaul spot rates excluding fuel. Spot rates stepped higher through peak season as regulatory constraints on the driver pool took hold. Rates remain significantly higher on a y/y comparison in June.

Werner said one-way contract renewals have continued to accelerate through bid season after yielding mid-single-digit increases earlier in the year. The company renegotiates one-fourth of its contracts in the first quarter and roughly one-third in the second quarter.

Revenue per total mile is forecast to increase between 1% and 4% year over year in the second quarter, which seems conservative given the 3. 6% increase it booked in the first quarter. Utilization has been the bigger lever for Werner.

Most public carriers have held off on equipment additions, instead choosing to increase paid miles through better freight selection, load planning and route optimization. Revenue per truck per week was nearly 10% higher y/y at Werner’s one-way fleet in the first quarter, as miles per truck increased 5. 7%.

Management teams said rebid and mini-bid activity has been widespread across verticals and geographies—a signal the market likely stays tighter for longer. “Are we going to have a leveling, or is this going to continue to accelerate?” Frazier said.

Schneider noted on its first-quarter call that contract renewals were at the highest level since 2021 as “irrational capacity” is leaving the market. Jim Filter, group president of transportation and logistics at Schneider, said Tuesday it will probably take “a couple of allocation events to recoup price.”

However, he believes the shift in industry capacity is structural, not transitory, suggesting the inflationary rate environment could last longer than in prior cycles. (Filter will succeed Schneider President and CEO Mark Rourke on July 1. Rourke will transition to Executive Chairman.)

Montgomery ruling viewed as ‘net benefit’ by brokers with assets The three companies said they didn’t need to alter third-party carrier onboarding procedures at their brokerage units following the Supreme Court’s landmark ruling in the Montgomery v. Caribe Transport II case.

(The decision widened liability exposure for freight brokers found negligent in their driver hiring practices.) The companies implemented more stringent protocols years ago to weed out chameleon carriers and reduce cargo theft. Tech and data tools have also improved since the pandemic, allowing for vetting on an ongoing basis.

The companies have culled approved-carrier lists by at least half since. “Based on our experience, there aren’t 50,000 carriers in this country that you could vet and say that they’re safe,” Filter said. Werner said the Montgomery decision will be a “net benefit” for its brokerage operations. It believes size and sophistication matter.

It said shippers are aligning with providers that can guarantee assets and safety while providing the flexibility of a broker model. The brokerage market is likely to consolidate further as shippers shift freight allocations and insurance carriers get more selective in underwriting risk.

More FreightWaves articles by Todd Maiden: • Analysts say Amazon won’t shake LTL market—yet • LTL general rate increases no longer an annual event • ArcBest raises Q2 outlook for LTL, asset-light units The post Truckload carriers eyeing multiyear rate upcycle appeared first on FreightWaves.