The freight market is going through a shake-up, and if you’re a small carrier, you are feeling it. Rates aren’t what they were even a month ago, and the numbers don’t lie — spot and contract rates are trending downward, rejection rates are staying low, and overall freight volume is slipping.Freight demand overall is down 6.5% month over month, and fuel costs have risen 6 cents per gallon over the same period. That means not only are there fewer loads available, but the cost to run those loads is creeping up. With fewer shipments moving and too many trucks chasing the same freight, brokers and shippers have the upper hand, which keeps rates low and makes it harder for small carriers to turn a profit.
If you’ve been struggling to find loads that make sense for your business, you’re not alone. Spot rates are already down 1% from last week and 2.7% from last month, while contract rates have dipped 1.6% over the past 30 days. And with fuel, insurance and maintenance costs continuing to eat away at margins, it’s clear that this market is testing owner-operators and small fleets in a big way.This is one of those moments in trucking where survival depends on making smart moves. Running cheap freight just to keep the wheels turning isn’t the answer, but sitting idle isn’t either. Now’s the time to watch the market closely, cut unnecessary expenses and focus on lanes that actually turn a profit – because in a market like this, the carriers that adapt and make every mile count will be the ones still standing when the tide turns. There are some markets like Boston; Bristol, New Hampshire; and Austin, Texas, that are showing up as hot markets, but there are many more cold markets. Not to mention, the hot markets are small and only account for roughly 1.5% of the total freight market.
Right now, overall the market is soft, meaning there’s more capacity (trucks available) than freight to move. That imbalance is driving rates down across the board. Here’s what the data is telling us:
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Spot rates are down 1% from last week, 2.7% from last month and 2.3% from last year. If you’re running load board freight, you’re already feeling the pinch.
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Contract rates aren’t much better, dropping 1.6% from last week, 1.6% from last month and 2.6% from last year. Even those with dedicated lanes are seeing rate pressure.
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Rejection rates are near flat, which means carriers aren’t turning down loads — likely because there aren’t many alternatives. That’s a telltale sign that demand is shrinking.
If you’re an owner-operator, this trend is concerning because you are wondering when things are going to turn the corner. Low rejection rates mean brokers and shippers have more control over pricing: They simply have more carriers to choose from and with low rejection rates, that means carriers are taking whatever comes their way. When demand for trucks is low, rates follow suit, and right now, both contract and spot rates are showing signs of decline.