Freight broker RXO reported that its truckload spot rate index logged the largest sequential gain in five years during the second quarter, and the climb has continued into the third. The index, which tracks linehaul rates and excludes fuel surcharges, was up 32.4% year over year in the second quarter after a 16.5% annual increase in the first. So far in the third quarter it is running 43% above the prior year.

RXO said the index has not seen this level of rate inflation since the pandemic-era surges, with the second quarter posting both the highest year-over-year reading and the largest sequential increase since the second quarter of 2021. The company's all-in cost-per-mile index, which does include fuel surcharges, stood at 154.9 in the second quarter, the highest reading since the first quarter of 2022.

Contract pricing has moved more slowly. Data from Cass Information Systems showed contract rates excluding fuel and accessorial charges averaged 6% higher year over year in the second quarter, up from a 2.4% average annual increase in the first quarter. The Cass truckload linehaul rate index ran 8.6% higher year over year in July.

RXO tied the tightening to a steady exit of capacity driven by heightened regulatory enforcement and years of thin carrier economics. Chief strategy officer Jared Weisfeld noted carrier operating costs are up 29% excluding fuel from the prior cycle peak. Werner Enterprises reported a 10% annual increase in revenue per total mile in the second quarter and guided to a 10% to 13% annual gain for the third. FreightWaves rate data shows the spot market cooled after a July 5 peak.

Source: FreightWaves - https://www.freightwaves.com/news/broker-rxo-sees-tl-spot-rate-surge-extending-through-q3