Truckload spot rates to continue an upward trend, says RXO

RXO does not expect a material ramp in rates during the second quarter as the spot market has not carried out the increases of seasonal or weather events in recent months so that it would normally be at the start of a material supervision.

“C2 will not likely feel like a different dramatic operating environment, but we are in a changing market that could set us up for a more meaningful flip later in the year,” the report continued. “The gravity of inflation spike in freight rates depends largely on tariffs and how shipping and carriers respond.”

RXO said spot rates are expected to continue to increase in the second quarter even as imports and industrial production retreat. A typical seasonal lift is still expected for the quarter “especially if there is some stabilization in trade policy (ie, reducing or extracting tariffs).”

The wider trend for 2025 calls for more carrier exits (“Despite a couple of atypical months of the growth of the operating authority in March and April”) and the costs of operating high carriers to keep weight up at rates.

RXO also highlighted an opportunity for a more material reduction in rates if trade tensions calm down before the peak season and the carrier leaves more noticeable. That scenario would likely mean “contract rates and route guidelines set in a softer 2024 market may not survive a tighter market in late 2025, when the spot market is likely to become more profitable than the contract market.”

“Having said that, although we are in an inflation rate environment, we do not anticipate the kind of extreme conditions we have experienced in the last inflation market in 2020 and 2021.”