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As lingering volatility tied to severe winter weather was fading into more typical seasonal patterns, rapidly rising fuel costs disrupted rates and distorted the overall market picture this month.
Diesel price increases drove up all-in rates as surcharges adjusted to the higher national average, with contract-heavy shippers feeling the most immediate impact. At the same time, linehaul rates appeared to decline, but this was a byproduct of spot rates lagging behind fuel spikes rather than a true reflection of underlying market conditions. Recent upward trends in linehaul rates support this assumption.
The result is an environment where shippers are paying elevated contract rates while spot-reliant carriers are absorbing higher upfront costs and often waiting weeks for reimbursement as rates adjust more slowly.
The reason for recent fuel price increases is growing uncertainty in global energy markets amid escalating geopolitical tension. As that story unfolds, it remains unclear how long prices will hold at current levels. However, if they remain elevated, spot rates will continue to rise to offset carrier costs or financial strain will accelerate capacity attrition, both of which will contribute to tighter supply conditions.
This pressure is building at a critical time for the freight market. While demand indicators remain mixed, spot activity continues to show year-over-year strength. Growing produce season demand is tightening reefer capacity across South Texas, Florida and California. Flatbed markets are also tightening as the construction and lawn and garden seasons ramp up alongside post-storm recovery volume.
With these variables adding to existing supply risks such as high operating costs and regulatory pressure, the market remains highly vulnerable to disruption as we approach some of the busiest shipping months of the year.
Read on for more on the latest supply, demand, rates and economic conditions trends shaping the market this month.
Demand improved in February as seasonal activity ramped up, with an additional boost from post-winter storm recovery freight. Contract volumes have shown growth in March. However, they remain below prior year levels. Imports declined from the January peak but remained historically elevated, while manufacturing expanded for a second consecutive month as new orders, production and backlogs increased.
Near-term demand is expected to build as produce season continues on a regional basis, supported by strong consumer spending and recent manufacturing improvements. However, whether those improvements indicate a true turnaround remains uncertain. Notably, some shippers are shifting volume toward rail and intermodal to reduce exposure to elevated fuel prices, which could temporarily drag on truckload demand.
Carriers relying heavily on spot market freight, especially smaller businesses, are facing increased financial strain as all-in rates lag rising fuel prices. Meanwhile, high operating costs, tightening driver supply and ongoing regulatory enforcement continue to constrain capacity.
Supply is likely to tighten further as seasonal demand builds through April and May. Fuel prices will continue to play an important role — lagging spot rate increases could accelerate attrition, whereas higher FSC-protected contract rates could improve shipper routing guide compliance. Further, equipment orders have improved but not beyond replacement levels, meaning supply is unlikely to expand enough to meet any near-term demand growth or market volatility that may materialize in the coming months.
Rising fuel costs pushed all-in contract rates higher in March, while spot linehaul pricing remained low as rates failed to catch up with fuel increases. Flatbed markets remained historically elevated amid seasonal tightness and post-winter storm recovery volumes, and reefer rates softened outside of key produce regions.
Outside of seasonal volatility, fuel will have the most significant influence on the near-term rate environment. If prices remain elevated, spot rates will likely rise as carriers seek to cover higher costs, particularly as demand increases through in the summer months.
Manufacturing expanded for a second consecutive month, with increases across new orders, production and backlogs. Consumer spending also reached its highest year-over-year growth rate since early 2023, though those gains were primarily driven by higher-income households.
Geopolitical tension remains a key economic wildcard, as rising inflation tied to increased energy costs may limit the potential for interest rate cuts in the near term. However, if strong consumer spending and recent manufacturing growth continue, it would help support stable freight demand.
While most drivers have returned from seasonal holiday time off, the Canadian labor market is facing a structural shift as new federal regulations on foreign drivers prompt a notable increase in industry exits. This contraction in the driver pool has kept outbound Canada rates elevated, even as inbound capacity has begun to normalize toward late last year’s levels. Fuel costs remain a primary justification for sustained rate floors, providing little relief to shippers despite stabilization in some lanes. The capacity crunch is most notable in the temperature-controlled sector, where reefer rates have surged to record highs across the board for Canadian shipments.
Capacity is expected to remain under pressure as the full impact of driver attrition and regulatory compliance continues to filter through the market. While dry van rates may level off on inbound lanes, the reefer segment will likely face persistent volatility and tightening supply as seasonal demand ramps up. Shippers should anticipate that high fuel surcharges will remain a fixed narrative in rate negotiations for the foreseeable future. The shrinking availability of specialized equipment and a smaller overall driver pool suggest that any significant surge in volume will quickly trigger further rate increases across both domestic and cross-border corridors.
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Matt Pyatt is the Chief Executive Officer of Arrive Logistics. He co-founded Arrive with President Eric Dunigan in 2014 after building his career at Command Transportation. As CEO, he is responsible for overseeing the company’s financial health, strategic vision and culture, as well as building a scalable leadership team to support Arrive’s growth.
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Scott Sandager is the Chief Administrative Officer at Arrive Logistics. He joined Arrive in 2018, bringing over 14 years of logistics and brokerage experience, with expertise in project and change management, organizational design, talent development and customer satisfaction. Scott previously held many diverse roles of increasing responsibility with AFN, a Chicago-based freight brokerage.
Eric Dunigan is the President of Arrive Logistics. He began his career at Command Transportation before co-founding Arrive with Matt Pyatt in 2014. As president, he is responsible for driving revenue and growth, as well as leading the Strategic Partnerships team — a veteran group of supply chain experts who work with Arrive’s customers to reimagine their shipping strategy.
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David Spencer is the Vice President of Market Intelligence at Arrive Logistics. David joined Arrive in 2017 after spending six years at AFN focused on business intelligence. His department provides critical market data and expert analysis to internal teams and publishes monthly market updates for shippers and carriers under the Arrive Insights banner.
Andrew Clarke is Board Chairman for Global Critical and DCLI, Inc., and a board member for Arrive Logistics and Element Fleet Management Corp. His 20 years of global transportation and logistics experience include time as CFO of C.H. Robinson, CEO of Panther Expedited Services, Inc. and SVP and CFO roles at Forward Air Corporation.
Dean Croke is a Market Analyst at DAT Solutions, where he focuses on freight market intelligence and data analytics. His 35 years of experience with data analytics, transportation, supply chain management, mining and insurance risk management include time as co-founder of FleetRisk Advisors and in a number of other high-level roles with FreightWaves, Spireon, Lancer Insurance, Omnitracs Analytics (formerly Qualcomm) and more.
Asanka Jayasuriya is the CTO at 8VC. He is an accomplished engineering and product leader with 20+ years of experience in the cloud. He has a strong background in enterprise SaaS, PLG products, infrastructure, and security. Notably, he served as CTO and SVP of Engineering at SailPoint, leading their successful transition to the cloud and successful exit event. He also held senior leadership roles at InVision, Atlassian, and Amazon, driving growth, operational excellence, and innovation. At 8VC, Asanka works with the entrepreneurs and leaders in our portfolio as a virtual CTO supporting their growth.
Chad Eichelberger is the President of Reliance Partners. Since 2015, he’s leveraged his extensive experience in risk management, compliance, best practices and contracts to lead the company’s logistics and truck insurance strategy and operations. Chad was previously the President of Access America Transport, where he led the company from $8M to over $600M in revenue.
Barry Conlon is the CEO and founder of Overhaul, the global leader in active supply chain risk management and intelligence. With a remarkable career spanning over 30 years in supply chain security, he is widely regarded as a trailblazer in modern-day supply chain security standards and best practices.
As VP and Senior Analyst at ACT Research, Tim analyzes commercial vehicle demand and alternative powertrain development (i.e. electrification), and authors the ACT Freight Forecast, U.S. Rate and Volume Outlook. He previously spent fifteen years in equity research focused primarily on the transportation, machinery, and automotive industries, and co-founded leading equity research firm Wolfe Research.
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