September Freight Market Update: Demand Turns Positive, but Capacity and Fuel Drive Costs Higher

The freight market reached an important milestone in August, with shipment volumes increasing year over year for the first time since January 2023. After a record 42-month downturn, the latest data suggests that the market may finally be moving off the bottom.

That improvement does not yet represent a demand boom. August largely reversed shipment declines from June and July, and freight activity remains relatively soft across much of the economy. The more important development is that transportation costs are rising much faster than the volume of freight moving through the system.

Limited equipment availability, carrier selectivity, contract repricing, and rapidly increasing diesel prices are all contributing to higher costs. As a result, shippers are entering the fourth quarter with a market that looks more stable than it did during the summer peak but has limited capacity available to absorb disruption.

Freight Demand Has Turned Positive

Freight shipments increased 5.6% from July and 2.1% year over year in August. On a seasonally adjusted basis, shipments rose 5.0% from the prior month.

The year-over-year increase ended the longest downturn in the shipment index’s history. It is an encouraging sign that inventory destocking and the broader freight recession may be nearing an end.

However, one positive month should be viewed in context. August’s improvement largely offset weakness recorded during the previous two months, while the year-to-date market remains soft. Normal seasonality could support additional year-over-year growth in September, but current conditions still point toward a gradual recovery rather than a sudden surge in freight.

The difference between shipment growth and freight spending reinforces that conclusion. Total freight expenditures increased 18.7% year over year in August, compared with shipment growth of only 2.1%. On a seasonally adjusted basis, expenditures increased by 6.0% from July, while shipments increased by 5.0%.

Shippers are therefore paying considerably more without moving a comparable amount of additional freight. Higher linehaul rates, fuel costs, and shipment mix are increasing transportation spending before a broad demand recovery has developed.

Dry Van and Reefer Rates Remain Well Above Normal

Dry van spot linehaul averaged $2.17 per mile during the week ending September 18, excluding fuel. That was down slightly from the prior week but remained 32.8% above last year and 19.7% above the nine-year seasonal average.

The short-term direction has stabilized since the early-July peak, but the underlying market remains tight. Dry van load posts were 33.3% above last year, while available equipment posts were 30.5% lower. The dry van load-to-truck ratio increased to 11.22 as freight returned from the Labor Day slowdown.

Near-term forecasts suggest that dry van spot rates could remain near current levels through late October. That would represent greater stability, but not a return to the pricing environment experienced in 2025.

Refrigerated freight remains even more constrained. Reefer spot linehaul averaged $2.71 per mile in mid-September, excluding fuel. Rates were 35.0% above last year and 26.6% above the nine-year seasonal average.

Reefer load posts were 40.7% higher than last year, while equipment posts were 34.5% lower. The load-to-truck ratio remained elevated at 19.00, compared with 8.84 during the same period last year.

Regional harvest cycles are increasingly important. Outbound demand is strengthening across parts of the Upper Midwest, the Great Lakes, and the Pacific Northwest, while earlier southern produce markets are becoming less constrained. National reefer averages may remain relatively stable even as individual agricultural lanes tighten or soften significantly.

Contract Pricing Is Catching Up

The higher spot environment is continuing to move into the larger contract market. The truckload linehaul index increased 0.7% from July and 11.3% year over year in August, reaching its highest level since 2022.

This measure includes both spot and contract freight, so the full increase should not be interpreted as a contract-only move. However, contract freight represents most of the for-hire truckload market, and the continued increase indicates that broader pricing is adjusting higher even as spot rates moderate from their summer peak.

Including fuel, September contract rates were approximately 33% above last year, while spot rates were approximately 46% higher. Excluding fuel, contract increases are generally being reported in the 5% to 15% range, with larger adjustments in certain markets and lane mixes.

This is the normal lag that follows a rapid change in the spot market. Contract agreements, mini-bids, and routing guides take time to adjust. As they do, more of the summer rate increase becomes embedded in ongoing transportation budgets rather than disappearing with seasonal pressure.

Routing-guide performance has improved during this adjustment. Average North American route-guide depth improved to 1.35 in August. Shipments under 400 miles performed relatively well at 1.25, while shipments over 600 miles were more challenging at 1.52.

The same difference is visible in route-guide failures. Long-haul shipments averaged an 8.5% weekly failure rate in August, compared with 3.6% for shipments under 400 miles. Tender acceptance is improving, but longer-haul freight continues to carry greater service and cost risk.

Capacity Is Still Driving the Market

The market’s pricing pressure continues to come primarily from limited supply. Available equipment remains sharply below last year’s levels across both dry van and reefer, while carrier failures, insurance expenses, driver constraints, and regulatory enforcement continue to reduce usable capacity.

Federal authorities recently ordered more than 110 commercial-driver training schools to close and expanded audits of third-party commercial-driver-license testing. Additional enforcement involving other schools may further limit the pool of qualified drivers.

Carriers are also becoming more selective about the freight they accept. Dedicated opportunities, round trips, and loads that support an existing network are generally more attractive than freight that creates empty miles or operational imbalance. Most fleets remain focused on utilization, driver retention, and equipment replacement rather than aggressive expansion.

Class 8 tractor sales moved above replacement levels in July and August, allowing the fleet to expand for the first time in approximately 18 months of tightening. That is an early sign of a possible supply improvement, but additional tractors do not immediately replace failed carriers or resolve driver availability issues.

With less excess capacity in the market, even a modest increase in demand can create an outsized response in rates and service. Seasonal events, enforcement actions, severe weather, or sudden changes in freight flow will have a greater impact than they would in a market with abundant backup capacity.

Diesel Has Become a Major Cost Pressure

The national average diesel price reached $6.529 per gallon as of September 21. That represented an increase of $0.562 per gallon, or 9.4%, in only two weeks from the $5.967 reported on September 7.

The rapid increase creates immediate pressure on carrier cash flow, fuel surcharges, and shipper transportation budgets. Even if underlying linehaul pricing remains stable, higher diesel can continue pushing all-in transportation costs upward.

Supply conditions offer little near-term relief. Ultra-low-sulfur diesel inventories were 14.8% below last year as of September 11. Inventories would normally build ahead of fall refinery maintenance, but that seasonal cushion has not developed.

Refineries were already operating at 96.8% utilization, while four-week distillate exports were 24.7% above last year. Strong export demand is competing with the domestic market for available supply even while refiners operate near full capacity.

Shippers should continue evaluating fuel and linehaul separately. A stable or declining linehaul rate does not necessarily translate into a lower all-in cost when fuel prices are increasing this quickly.

Demand Growth Remains Concentrated

Although the broader freight data improved in August, growth remains concentrated in a relatively narrow group of sectors. Trucking ton-miles increased only 0.1% from June to July on a seasonally adjusted basis and 1.2% year over year.

Much of the year-over-year improvement is tied to the infrastructure supporting artificial intelligence and data centers. Electrical goods, professional equipment, machinery, fabricated metals and related manufacturing categories are generating freight as companies invest in computing capacity and the power systems needed to support it.

Data-center construction increased 52% year over year, while broader manufacturing-plant construction declined 25%. That contrast explains why industrial freight can feel strong in certain customer segments and lanes without representing a broad manufacturing recovery.

Manufacturing indicators are also providing mixed signals. Some regional measures show strong new-order momentum, while other national data remains considerably softer. The combined picture points toward modest expansion rather than the broad growth normally associated with a major freight upcycle.

Cross-Border Freight Faces Continued Volatility

Canada-U.S. trade policy remains another source of uncertainty. U.S. tariffs of 50% on certain Canadian goods prompted some businesses to accelerate shipments ahead of the August implementation date. That pull-forward temporarily tightened capacity and increased pricing in selected Canada-to-U.S. corridors.

Canada’s retaliatory tariffs took effect September 8 at rates of 15%, 25% and 50% across targeted U.S. goods. Freight demand has moderated since the earlier pull-forward, but businesses are still evaluating tariff exposure, sourcing decisions and inventory strategies.

Canadian truck capacity remains near a five-year low, giving carriers greater pricing leverage and leaving less flexibility when freight flows shift suddenly between lanes or directions.

The transportation risk is not limited to whether total cross-border volume increases or decreases. Trade-policy announcements can alter shipment timing, commodity mix, and lane balance faster than carrier networks can adjust. One corridor may tighten as shippers accelerate freight movement, while another softens as buyers delay purchases or switch suppliers.

Outlook: A Gradual Recovery With Limited Flexibility

The freight downturn appears to be ending, but the market is not entering a demand-led boom. Shipment growth is improving gradually, while capacity constraints, contract repricing, and diesel inflation are producing a much faster increase in transportation costs.

Dry van and reefer spot rates may remain relatively stable through early fall, but both are likely to stay well above 2025 levels. Contract pricing should remain firm as agreements and routing guides continue catching up to the higher market. Fuel volatility adds another layer of cost that may move independently of linehaul pricing.

Shippers should pay particular attention to long-haul freight, refrigerated harvest markets, fuel-surcharge exposure and cross-border lane balance. Pricing assumptions established earlier in the year may no longer reflect current operating costs or capacity availability.

The market may appear stable when conditions are normal, but it has less ability to absorb disruption than it did during the freight downturn. Planning around that reduced flexibility will be essential through the remainder of 2026 and into 2027.