If you’re a small carrier, you’re likely wondering what happened to the shift in the market — the key word here is gradual. While many of the signals point to a tightening freight market, the reality is that the road back to a balanced supply-and-demand cycle is moving at a slow crawl rather than a sprint.
According to recent public carrier earnings reports, we’re not yet at a full-scale market correction. As FreightWaves’ JP Hampstead pointed out, progress in tightening capacity and rising rates remains slow and halting. The data backs this up. Knight-Swift, the nation’s largest truckload carrier, saw a 0.7% decline in truckload revenue per loaded mile, even after a 6% reduction in active tractors to boost efficiency.
What does that mean for you as a small carrier? It means you need to be surgical with your decision-making — because while the broader market is showing improvement, profitability still comes down to knowing where and when to run.
Spot market trends: Are we finally seeing some life?
One of the biggest indicators that capacity is tightening is the rise in tender rejection rates — a sign that carriers are starting to reject contract freight in favor of higher-paying spot market loads. Tender rejections are up nearly 1% month-over-month and significantly higher than the past two Januarys. This suggests that carriers are beginning to regain some control over pricing power.
At the same time, spot rates have risen to just $0.40/mile below contract rates, a much narrower gap than what we saw throughout most of 2023. Historically, this kind of spread signals that the worst of the freight recession is behind us. It’s not a full rebound yet, but we’re heading in the right direction.
That said, we’re still waiting for a true breakout moment. The next potential inflection point? March. Historically, the spring season brings an uptick in freight demand, and if capacity remains constrained, we could see more upward movement in rates.
Rail intermodal: A slow recovery
While truckload spot and contract rates are showing signs of life, rail intermodal pricing remains sluggish. The latest SONAR data shows that intermodal contract rates — including fuel — in major lanes like Chicago to Newark are starting the year below early 2023 and 2024 levels.
According to CSX, meaningful intermodal rate increases likely won’t materialize until 2026, largely due to the way intermodal contracts roll over on an annual basis. While rail volumes are expected to grow this year, pricing improvements will lag behind truckload recovery.
Why does this matter? Because the truckload market competes heavily with intermodal in the eastern U.S., where CSX operates. If truckload rates climb faster than intermodal rates, we could see a surge in truckload demand as shippers shift volume away from rail. This is another indicator that the truck market is tightening — but at a slower-than-expected pace.
Where the money is: Key freight markets to watch
If you’re looking for where to position your truck for the best opportunities, here’s what we’re seeing in the latest market data:
But remember: just because a market is “hot” doesn’t mean it’s always the right move. Maine, for example, may offer strong inbound rates, but if you don’t have an exit strategy, you’ll be stuck deadheading for miles to find your next load.
The fuel factor: A rare bright spot
If there’s one silver lining in today’s freight market, it’s fuel prices. Diesel is averaging $3.57 per gallon, down significantly from the $4.00+ per gallon levels seen throughout much of last year.
For an owner-operator running 100,000 miles per year, that’s an annual savings of over $7,000 — a major break that can help offset the still-recovering freight rates.
However, where you fuel matters. The diesel price map shows significant disparities — some regions are $0.60 per gallon cheaper than others. If you’re not planning your fuel stops strategically, you’re throwing money away. Tactical fueling is just as important as tactical routing.
Will deportation policies lead to a labor crunch?
One factor that hasn’t been widely discussed but could impact freight markets is the potential labor disruption caused by increased deportation efforts under changing immigration policies.
Many of the industries that support trucking — warehousing, distribution centers and agriculture — rely heavily on immigrant labor. If these policies result in widespread labor shortages, it could lead to higher shipping costs, bottlenecks in freight movement, and even potential disruptions in the supply chain.
While it’s too early to gauge the full impact, small carriers should pay attention to labor trends in key freight hubs and warehouse-heavy regions. A tightening labor market could have a trickle-down effect on freight capacity and rates.
Final thoughts: What this means for you
The trucking market is slowly — but surely — on its way back to a more balanced environment. However, progress remains gradual, and small carriers need to remain agile.
What you should do right now
We’ll be back in 30 days with another Playbook Market Update, where we’ll track these trends and see if the market is finally ready to turn the corner. Until then, stay sharp, stay strategic and keep your business moving forward.
The post Small carrier market update: The freight market’s slow, steady climb toward tightening appeared first on FreightWaves .
