Shippers Face Highest Freight Bills Since 2021 as Truckers Push for More

US shippers are paying the most to move freight in five years. Truckload carriers say bills will keep climbing in 2027, even though demand has barely moved.

Shipper spending rose 32.1% in the third quarter from a year earlier, while shipment volumes edged up just 0.5%, according to the U.S. Bank Freight Payment Index. Spending climbed in every region, led by a 51.6% jump in the Southwest. “Even where volumes are flat or declining, tighter capacity and higher operating costs are driving spending higher,” said Bobby Holland, director of freight business analytics at U.S. Bank.

Carriers say there is more to come. Covenant Logistics Group Inc. Chief Executive Officer David Parker told analysts on Friday that he expects truckload contract rates to rise by double digits again next year. He cited higher driver, equipment and insurance costs. “We’re going to continue to raise rates,” Parker said. “We have to because of the cost.” Covenant’s third-quarter revenue rose 19% to $353.9 million.

Parker said federal enforcement against unqualified drivers and manipulated electronic logs would keep taking capacity out of the market.

Results from less-than-truckload carriers were sharply divided. XPO Inc. reported adjusted earnings of 1.70 dollars a share, 13 cents above analysts’ estimates, as its LTL operating ratio improved 260 basis points to 80.1%. Saia Inc. posted record quarterly revenue of $983 million, up 17%, on a 9% rise in tonnage.

TFI International Inc. shares fell almost 15% after Chief Executive Officer Alain Bedard again criticized the company’s US LTL business. He estimated that its operating ratio was closer to 97%. “We’ve got to correct the situation,” Bedard said, adding that the company had “no intention of selling” the unit.