The freight market is sending a clear signal: shippers are paying more to move less, while available capacity continues to contract. Manufacturing demand remains uneven, intermodal is taking share from long-haul truckload, and rising operating costs are putting additional pressure on carriers.
At the same time, regulatory enforcement is removing capacity from the market, while diesel prices have moved back above $5 per gallon.
Here’s what matters now.
Demand Level & Outlook
Softer volumes, slightly higher shipper spend
The demand picture remains mixed. Manufacturing orders are still in expansion territory, but growth is increasingly concentrated in industrial sectors tied to AI infrastructure and defense, while consumer-oriented sectors remain weaker.
The Institute for Supply Management’s July new orders index came in at 56.7, remaining firmly in expansion territory but below the 62 average recorded in 2017 and 2018.
Input costs remain a challenge. Prices paid cooled from the low 80s in April and May to the low 70s, but that still signals meaningful cost pressure.
The result is an environment where orders remain relatively firm while input prices stay elevated, limiting demand-side upside and keeping the current freight cycle largely supply-driven.
Freight is shifting from road to rail
Domestic intermodal volumes are up 10% year over year, while long-haul truckload tenders are at their lowest point of 2026—even with California port imports running strong.
The economics are driving the shift:
- Chicago to Elizabeth, NJ: truckload contract rates are up 31%, including fuel, versus 5% for intermodal.
- Atlanta to Elizabeth, NJ: truckload rates are up nearly 60%, versus 6% for intermodal.
- Domestic container growth is up more than 20% in Atlanta, 9% in Chicago and 3% in Los Angeles.
- Total tender volumes are up 6% year over year, with long-haul the only segment not growing.
As intermodal enters peak season in September, long-haul truckload is losing some of its most fungible freight to rail. Tight downstream inventories remain a key swing factor, however, and a demand shift could move freight back to trucks quickly.
Shippers are paying more to move less
The U.S. Bank Q2 Freight Payment Index reinforces the imbalance.
Shipments declined 2.8% year over year, while shipper spending increased 28.1%. Capacity—not fuel—was the primary driver.
The Southwest saw the widest gap, with shipments down 20.2% while spending increased 39.9%. The Midwest was the only region where spending declined.
Bottom line: Freight demand is not collapsing, but it is becoming more selective. Industrial demand remains resilient while consumer-oriented freight softens, and shippers are paying significantly more despite moving fewer shipments.
Supply, Capacity, and Carrier Operating Costs
Capacity keeps exiting while operating costs set new records
The supply side of the market continues to tighten. Truckload tender rejections reached 14.36%, well above the six-month average of 10.9%. Meanwhile, the Logistics Managers’ Index transportation capacity reading fell to 28.4 in July from 30.8 in June. Readings below 50 indicate contraction.
Enforcement is the new gatekeeper
Operation Highway Shield removed more than 750 unsafe trucks or drivers from the road during a late-July Midwest enforcement blitz. Additional enforcement around non-domiciled CDLs, driver schools and electronic logging device providers is also removing low-cost capacity.
The result is important: carriers are seeing more freight not necessarily because demand has grown, but because fewer fleets are competing for it.
Where the cost pressure shows up
Carrier costs continue to climb:
- Fuel: 75 cents per mile in Q2, up 47.1% sequentially and 78.6% year over year.
- Operating cost: 2025 established a record at $2.336 per mile, with ATRI expecting 2026 to be higher.
- Tender rejections: 23.5% for flatbed, 19.46% for reefer and 14.36% nationally.
Diesel is back above $5
Diesel prices have reversed course after falling late in Q2. After reaching $5.64 in April and falling to $4.67 late in Q2, diesel has climbed back to $5.13.
Distillate inventories are 6.6% below last year, exports are running 18% above the same period in 2025, and refinery utilization is at 95.6%.
Capacity is leaving faster than freight
Load-to-truck ratios remain close to double last year’s levels:
- Van: 10.38 vs. 5.45 last year
- Reefer: 19.51 vs. 9.17
- Flatbed: 36.97 vs. 20.31
Bottom line: Capacity is contracting faster than freight demand is slowing. With little slack remaining in the network, disruptions are increasingly being reflected in rates rather than absorbed by excess capacity.
Spot & Contract Market Trends
A soft week, still 33% to 39% above last August
Spot linehaul rates eased modestly during Week 32 as summer volumes softened. But rates remain significantly above 2025 levels:
- Dry van: $2.28/mile, down $0.04 for the week and up 39.2% year over year
- Reefer: $2.64/mile, down $0.01 and up 33.7% year over year
- Flatbed: $2.79/mile, down $0.04 and up 37.3% year over year
All three modes remain well above their nine-year seasonal averages.
The weekly decline is seasonal. The year-over-year gap is the more important signal—and that gap has not narrowed.
Spot has all but caught contract
The relationship between spot and contract rates is also changing. Q2 spot rates averaged $3.02 per mile, up 41.1% year over year. Contract rates averaged $3.06, up 20.9%.
The gap between the two markets is now only $0.04, compared with $0.39 a year ago. Load posts fell 3% to 2.76 million while equipment posts dropped 11% to 166,704—a second consecutive week in which capacity declined faster than demand.
Key takeaway
The freight market is becoming increasingly supply-constrained.
Demand is softer in several consumer-oriented sectors, but industrial activity remains resilient. At the same time, intermodal is capturing more long-haul freight, regulatory enforcement is removing capacity, carrier operating costs continue to rise and diesel has moved back above $5.
The result is a market where shippers are paying significantly more to move fewer shipments—and there is little excess capacity available to absorb the next disruption.
For shippers, understanding capacity trends, mode economics, carrier costs and the relationship between spot and contract pricing will be critical as the market moves toward the next bid cycle and into the fall freight season.