Chart of the week: Van Contract Rates, National Truckload Index (transport costs less fuel than over $1.20/gal) – USA SONAR: VCRPM1.USA, NTIL12.USA
Long-term dry truckload (VCRPM1) rates (contracts) have remained essentially stable over the past year, increasing approximately 1% since July 2024. Short-term spot rates (NTIL12), which are naturally more volatile, have increased approximately 4% over the same period. As we talk about capacity leaving the market at alarming rates, what does this stability of contract rates mean for 2026?
In the short term, the answer is probably nothing. Contracts are unlikely to increase any time soon, as there is currently no significant pressure on them. Offer rejection rates remain within acceptable ranges for most shippers, and while spot rates are less reliable, they continue to offer deep discounts to those willing to pursue them.
Seasonal pressure will increase over the coming months as the holiday shipping season heats up, but it is difficult to imagine this translating into large or lasting increases in contract rates. Demand remains extremely weak, with little sign of improvement beyond speculation. There is, however, an important caveat.
Last week’s chart article showed that capacity appears to be leaving the market faster than demand is declining, which has little to no historical precedent over an extended period of time. The main reason is that this freight recession lasted longer than any other recession in the modern era.
In the chart above, both rate lines fall sharply through most of 2022. The faster-moving spot rate bottomed in May 2023, while contract rates found a softer bottom in 2024.
Even though spot rates have been rising since 2023, they remain largely unprofitable. Contract rates have been more resilient, suggesting they are currently near the lowest sustainable levels for most carriers.
The American Transportation Research Institute’s (ATRI) latest report on carrier costs confirms this, showing that average operating costs increased 33% between 2019 and 2024. The Contract Rate Index (VCRPM1) is about 16% higher than its 2019 level, meaning operating costs have increased twice as fast as the rates the market is willing to pay.
Additionally, recent regulatory measures targeting non-domiciled and undocumented drivers have intensified. U.S. Department of Transportation Secretary Sean Duffy recently said he plans to crack down on “CDL factories” and the fleets that use them.
This increased regulatory pressure, which began in the spring, has only recently begun to affect the pricing environment. Spot rates spiked unusually in early October following reports that immigrant drivers were avoiding the roads due to increased ICE enforcement.
