RXO Q1 forecast: 2025 upswing will feel more like 2014 than 2021
RXO recently released its Q1 2025 Truckload Market Forecast, with its Curve Index showing a continuation of rate inflation first observed in Q4 2024. The Curve, formerly the Coyote Curve, is a proprietary index measuring year-over-year changes in truckload linehaul spot rates, excluding fuel.
The forecast highlighted how rising spot rates and capacity exiting the market are driving the upswing, though the authors caution that the extreme conditions of the last inflationary market in 2020 and 2021 are not expected. While shippers may not feel dramatic changes yet, RXO warns that conditions are shifting in ways that could lead to tightening later this year.
The Q4 2024 Curve Index showed spot rates up 11.6% year over year, a jump from the 5.8% increase in Q3. This rise was driven by continued carrier exits, impacts from hurricanes Helene and Milton, and typical holiday shipping seasonality.
Contract rates, while still showing a slight year-over-year decline of 1.5% in Q4, moderated from the 3.4% y/y drop seen in Q3. This aligns with typical market behavior, as contract rates tend to lag spot rates by two to three quarters.
'Over the holidays, we saw market rate and coverage KPIs reach levels we haven't hit since Christmas 2022. While we have seen some of those gains moderate through the first quarter to date, the baseline has reset higher,' said Corey Klujsza, vice president of pricing and procurement at RXO. 'Though the rest of 2025 may not look like the peak in the COVID-era truckload market, we're seeing continued signs that we're past the bottom of the cycle.' Read the full article here.
The trucking industry may see an unexpected boost later this year as inflation reshapes consumer spending habits, according to Bob Costello, chief economist of the American Trucking Associations. Costello spoke at the 2025 Recruitment & Retention Conference in Nashville, Tennessee, Transport Topics reported, on how current economic trends could influence freight demand.
He says that as consumers face sticker shock from inflated costs of flights and accommodations, they might redirect their spending. 'They might start buying goods again, and that could help trucking,' he added.
However, Costello cautioned against overreliance on GDP growth as an indicator of trucking prosperity. 'About 70% of what is embedded in GDP are services, and you are not putting services in a trailer,' he pointed out.
On the housing front, Costello painted a mixed picture. While demand for housing remains strong, high interest rates have sidelined many potential buyers, impacting dry van and flatbed carriers that haul residential construction supplies. 'If your company hauls residential construction supplies, it's been tough,' he acknowledged. Adding complexity, Costello noted concerns about the availability of construction labor, partly due to recent immigration policies.
In contrast, nonresidential construction has shown promise. 'This is on the rise — it's been quite good,' he said, pointing to infrastructure projects and semiconductor plant construction as bright spots for trucking demand.
Costello forecasts modest growth in trucking demand for the year. However, he warns of a potential shakeout in capacity as companies that expanded during the pandemic boom times reassess operations. 'I think people got ahead of themselves and thought the recovery was coming sooner, and it wasn't. … 'Fleets are saying this is the worst downturn they can remember.'
ACT Research recently released its seasonally adjusted final January Class 8 order numbers, which showed still-healthy tractor orders despite lower year-over-year comps. Vocational truck demand was also strong. Carter Vieth, research analyst at ACT Research, wrote, 'Tractor orders totaled 18.4k units, down 11% y/y. It remains to be seen whether the decrease in orders this month will continue or was just a reversion after November and December highs. One month does not make a trend.'
According to FTR Transportation Intelligence, preliminary North American Class 8 net orders in January totaled 24,000 units, representing a 28% decrease month over month and a 15% drop year over year. This figure fell short of the seven-year January average of 27,950 net orders.
FTR notes the on-highway segment primarily drove the softening in order activity, while vocational orders remained relatively stable. Despite the January dip, cumulative net orders from September 2024 through January 2025 for builds in 2025 still show a 3% increase from the previous year.
Dan Moyer, senior analyst, commercial vehicles at FTR, said, 'A 25% U.S. tariff on imports from Canada and Mexico – currently paused for trade negotiations through early March – and a 10% tariff on Chinese imports as of February 4 could significantly increase costs for North American Class 8 trucks and parts if fully implemented and enforced indefinitely.'
Another challenge is the potential tariff impacts on the interconnected Class 8 OEM truck makers' supply chains. Moyer added, 'With roughly 40% of U.S. Class 8 trucks built in Mexico and around 65% of Canada's Class 8 trucks built in the U.S., tariffs and likely counter-tariffs threaten to disrupt supply chains and drive up vehicle prices.'
Summary: Despite ongoing deterioration in the dry van space, spot market and outbound tender rejection rates are outperforming compared to seasonal year-over-year comps. The past week saw the SONAR National Truckload Index 7-Day average rise 2 cents per mile all-in from $2.28 on Feb. 17 to $2.30. Spot rates are down 13 cents per mile m/m from $2.43 on Jan. 25, but when compared to last year, NTI is up 7 cents per mile from $2.23.
Spot market linehaul rates saw a smaller increase, up from $1.72 to $1.73 per mile w/w. Fuel costs are based on the average retail price of diesel fuel and fuel efficiency of 6.5 miles per gallon. The formula is NTID – (DTS.USA/6.5). Linehaul rates saw a similar decline compared to all-in spot rates, with the NTIL down 13 cents per mile m/m from $1.86 and 13 cents per mile higher y/y from $1.60.
Dry van outbound tender rejection rates posted a slight decline, down 15 basis points w/w from 5.18% on Feb. 17 to 5.03%. VOTRI is down 150 bps m/m but 86 bps higher y/y. A challenge for dry van carriers is that despite the higher outbound tender rejection rates on y/y comps, outbound tender volumes are low.
ATRI Invites Motor Carriers to Participate in 2025 Operational Costs Data Collection (ATRI)
Low pay keeping millions of Americans out of trucking, survey suggests (Land Line)
Trump's Threat to EV Trucking Rules Undermines Big-Rig Bets (Bloomberg)
Truckstop exec joins Trucking Parking Club to boost ties with enterprise fleets (FreightWaves)
BMO's numbers on trucking credit suggest worst may be over (FreightWaves)Werner pilots sideview cameras for safety, legal protection (Trucking Dive)
The post RXO Q1 forecast: 2025 upswing will feel more like 2014 than 2021 appeared first on FreightWaves.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
9 hours ago
- Yahoo
Carrier revocations overachievement illustrates increasing market vulnerability
Chart of the Week: Carrier Details Net Revocations – USA SONAR: Carrier Net Revocations—which measure how many truckload operators (businesses) are exiting the industry—have remained unseasonably elevated throughout the first half of the year. The current pace of exits is 16% higher than during the same period in 2024. Although new authority issuances have increased this year, they've stumbled in recent weeks as new enforcement behaviors and processes may be creating additional barriers to entry. The U.S. truckload market remains a challenging landscape for many carriers and 3PLs, with demand still too low to support stable business operations. While there has been marginal improvement over the past several years, it hasn't been enough to push rates high enough to support the current level of capacity. Many structural issues persist, raising the risk of capacity falling to critically low levels. Tender rejection rates (OTRI) — which measure how often carriers decline shipper requests for capacity — have been steadily rising since May 2023. This trend indicates declining carrier availability. In weaker markets, carriers are generally more willing to accept freight, so rising rejection rates in a down market carry more weight. Spot rates (NTIL), traditionally used to gauge truckload market health, have followed a similar upward trajectory. However, rates can be a noisy metric, as fluctuations in haul lengths and inflationary cost inputs can distort the picture. While spot rates are flat year-over-year, operating costs have risen—making profitability more elusive. Diesel prices have declined, offering a rare relief. (Note: fuel costs are excluded from the charted rate index.) In May, the president issued new guidance on enforcing english language proficiency at a state level for drivers. While the specifics of enforcement remain unclear, the move could create additional hurdles for new entrants. Additionally, efforts to crack down on CDL fraud have intensified, with stricter vetting processes further raising the bar for prospective drivers. Tender volumes (OTVI) are down approximately 10–15% compared to this time last year. While much of this decline stems from mode shift—particularly in long-haul freight moving to intermodal—recent trends suggest that overall demand may also be softening. Beyond the obvious issue of lower demand undermining core business, inconsistent volume makes it harder for carriers to maintain balanced networks, often requiring months to realign. All these factors point to growing systemic risk in the trucking industry as capacity continues to exit the market. Historically, every major market flip has had a catalyst, but each was preceded by recession-like conditions within the freight space. The 2017 market boom followed a year and a half of softness. The pandemic surge came after a deep freight recession in 2019. Today's downturn is one of the longest and most severe on record. The market may have flipped already if not for supply chain lessons learned during COVID and the broader economic uncertainty. Market inflections are inherently difficult to predict, but the sustained pace of carrier revocations signals that supply is rapidly converging with demand. The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on for future reference. SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time. The FreightWaves data science and product teams are releasing new datasets each week and enhancing the client experience. To request a SONAR demo, click here. The post Carrier revocations overachievement illustrates increasing market vulnerability appeared first on FreightWaves.
UPI
4 days ago
- UPI
Tampa Bay Rays negotiating potential sale to Jacksonville developer
The Tampa Bay Rays are playing home games this season at George M. Steinbrenner Field in Tampa, Fla., due to damage Tropicana Field sustained from hurricanes. File Photo by Steve Nesius/UPI | License Photo June 18 (UPI) -- The Tampa Bay Rays are in advanced talks to sell the franchise to a group led by a Jacksonville, Fla.-based real estate developer Patrick Zalupski, a source with knowledge of the negotiations told UPI on Wednesday. Sources told Sportico, MLB Network and the New York Post that Zalupski signed a letter of intent to purchase the franchise, which is valued at roughly $1.7 billion. The Rays' current principal owner, Stu Sternberg, bought the team for $200 million 2004. The Rays said in a statement Wednesday that they recently "commenced exclusive discussions" with a group led by Zalupski, Bill Cosgrove, Ken Babby and Tampa Bay investors. "Neither the Rays, nor the group, will have further comment during the discussions," the Rays said. The Rays went 80-82 last year, posting a losing record for just the fifth time in 17 seasons. They are 40-33 this season. The Rays are playing home games this season at George Steinbrenner Field -- the New York Yankees' spring training site in Tampa, Fla., -- because of damage Tropicana Field from Hurricanes Milton and Helene. The Rays announced last month that they canceled plans to build a new development and ballpark project. Delays from negotiations and hurricane damage hindered their ability to move to a new home. The St. Petersburg City Council said in November that it will cost nearly $66 million to repair Tropicana Field in time for the 2026 season.
Business Wire
5 days ago
- Business Wire
Covia Shares Latest Corporate Responsibility Report
INDEPENDENCE, Ohio--(BUSINESS WIRE)--Covia Holdings LLC has published its 20 th consecutive Corporate Responsibility Report. The 2024 report, Growing with Purpose, Inspired by Possibility, highlights the company's commitments to responsible operations, community engagement, progress against its 2030 goals, and stories that showcase team member contributions. The report is available on the company's website at: As in previous years, this report reflects the company's commitment to its pillars of environmental stewardship, positive social impact, and responsible governance and ethics. Covia's 2030 goals map to these areas and guide the organization's efforts to responsibly provide minerals solutions for a better tomorrow. In the 2024 report, Covia highlighted key achievements in the following areas: Safety, Health, and Security: Increased investment in training and pilot programs to continue driving improvement; total recordable incident rate at the end of 2024 was 0.89. Energy Efficiency and Emissions: Invested $13 million in energy efficiency-related projects, including equipment replacements and upgrades. Greenhouse gas emissions intensity of Scope 1 & 2 emissions has been reduced by 11% from the 2021 baseline. Community Impact and Philanthropy: Launched a program to provide immediate support to Covia employees affected by natural disasters such as Hurricane Helene. Land Management: Improved ratio of land rehabilitated to land disturbed to 1:2 from 1:6 in 2023. Progress Against the Company's Goals That Inspire: Reaffirmed and updated its 2030 goals and reported achieving or being on track to achieve all the goals. Bruno Biasotta, Covia's President and CEO, said in the 2024 report: 'Our people play an active and passionate role in Covia's work as a corporate citizen.' He added, 'Along with the progress described in this report, you'll find stories about members of the Covia team who work every day to build our enduring company. Our team members took all the photos you'll see in this document, which help bring those stories to life. I am incredibly proud of what we have accomplished and excited about the opportunities that lie ahead.' The report was prepared in accordance with the Sustainability Accounting Standards Board (SASB) Metals and Mining Industry Standard; 2024 was the sixth consecutive year for which the company has reported to this framework. In addition, the company has released its second Climate Risk and Opportunities Report (aligned with the Task Force for Climate-related Financial Disclosures (TCFD) framework). In addition to the report and these appendix items, the company has published a library of ESG/corporate responsibility summary documents, which are available at this website link: About Covia Covia responsibly provides minerals solutions for a better tomorrow. As a leading provider of diversified minerals, our products support a variety of industrial markets, including glass, ceramics, coatings, metals, foundry, polymers, construction, water filtration, and sports and recreation. The company serves its customers through a broad array of essential, high-quality products, including high-purity silica sand, nepheline syenite, feldspar, kaolin and ball clays, cristobalite, and coated materials. Long-standing relationships with a broad customer base enable Covia's market-inspired approach to innovation to enhance solutions and customer benefits. Underpinning these strengths is an unwavering commitment to safety and to sustainable development, further enhancing the value that Covia delivers to all its stakeholders. For more information, visit
