Chart of the Week: Van Contract Charges, Nationwide Truckload Index (linehaul price 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 12 months, growing roughly 1% since July 2024. Brief-term spot charges (NTIL12) that are naturally extra risky, 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 brief time period, the reply is probably going nothing. Contracts are unlikely to maneuver larger quickly, as there’s at present 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 transport season ramps up, but it surely’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’s, nonetheless, one essential 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 cause is that this freight recession has lasted longer than any within the fashionable period.
Within the chart above, each charge strains drop sharply by means of most of 2022. The faster-moving spot charge hit a flooring 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 present close to the bottom sustainable ranges for many carriers.
The most recent 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 degree—that 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 lately 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 lately begun to have an effect on the speed atmosphere. Spot charges spiked unseasonably in early October amid stories that immigrant drivers had been avoiding the roads because of stepped-up ICE enforcement.