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Chart of the Week: Van Contract Charges, Nationwide Truckload Index (linehaul value much less gasoline over $1.20/gal) – USA SONAR: VCRPM1.USA, NTIL12.USA
Lengthy-term (contract) charges for dry van truckload transportation (VCRPM1) have remained basically flat over the previous yr, rising roughly 1% since July 2024. Quick-term spot charges (NTIL12) that are naturally extra unstable, have risen about 4% over the identical interval. With all of the discuss capability leaving the market at alarming charges, what does this stability in contract charges imply for 2026?
Within the quick time period, the reply is probably going nothing. Contracts are unlikely to maneuver larger quickly, as there’s at the moment no significant stress on them. Tender rejection charges stay inside acceptable ranges for many shippers, and whereas spot charges are much less dependable, they proceed to supply deep reductions for these keen to pursue them.
Seasonal stress will improve over the following few months as the vacation delivery season ramps up, however it’s tough to see this translating into sturdy or sustained will increase in contract charges. Demand stays extraordinarily weak, with little proof of enchancment past hypothesis. There may be, nonetheless, one vital caveat.
Final week’s chart article illustrated that capability seems to be exiting the market sooner than demand is declining—one thing with little to no historic precedent over an prolonged interval. The first motive is that this freight recession has lasted longer than any within the trendy period.
Within the chart above, each charge traces drop sharply by means of most of 2022. The faster-moving spot charge hit a ground in Might 2023, whereas contract charges discovered a softer backside in 2024.
Though spot charges have been rising since 2023, they continue to be largely unprofitable. Contract charges have been extra resilient, suggesting they’re at the moment close to the bottom sustainable ranges for many carriers.
The newest American Transportation Analysis Institute (ATRI) report on provider prices helps this, exhibiting that common working prices elevated 33% from 2019 to 2024. The contract charge index (VCRPM1) is roughly 16% larger than its 2019 stage—which means the price of working has risen twice as quick because the charges the market has been keen to pay.
Moreover, latest regulatory actions concentrating on non-domiciled and undocumented drivers have intensified. U.S. Division of Transportation Secretary Sean Duffy not too long ago acknowledged that he plans to crack down on “CDL mills” and the fleets that use them.
This elevated regulatory stress, which started within the spring, has solely not too long ago begun to have an effect on the speed surroundings. Spot charges spiked unseasonably in early October amid reviews that immigrant drivers have been avoiding the roads on account of stepped-up ICE enforcement.
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