Why are contract rates rising and what does an 8% increase since fall 2025 mean for my logistics budget?

Contract rates have increased approximately 8% since fall 2025 due to persistent capacity constraints forcing shippers to rely on secondary capacity sources. This structural tightening suggests further increases are likely as the market remains tight. Budget holders should plan for 10-15% annual cost escalation in 2026 and lock in multi-year contracts early to avoid steeper rates later in the year.

What are tender rejection rates and why do they matter to my supply chain?

Tender rejection rates remain elevated, indicating that carriers are declining shipment offers at posted rates—a sign of genuine market tightness and pricing pressure. High rejection rates mean your standard rate offers are likely to be declined, forcing renegotiation and delays. This reinforces the need for dynamic pricing strategies and closer carrier partnerships to secure reliable capacity.

Is intermodal a viable alternative to truckload given current conditions?

Yes—the report highlights strong domestic intermodal growth driven by tight truckload conditions and attractive rate spreads. Improved service levels and available container capacity make intermodal an increasingly competitive option. However, this modal shift is already being pursued by competitors, so early adoption and route optimization are critical to capture cost and service benefits.

How do diesel prices and geopolitical disruptions affect my transportation strategy?

Diesel prices have become highly sensitive to geopolitical developments, complicating rate forecasts and margin planning. The report emphasizes the need for cost and risk management strategies—such as fuel surcharge mechanisms, hedging, or modal diversification—to insulate operations from energy cost volatility. Import planners should particularly note that global ocean capacity remains oversupplied but routing disruptions and energy costs are keeping rates elevated and shippers cautious.

Should I expect freight volumes to remain strong through mid-2026?

The report indicates sustained freight demand supported by U.S. manufacturing expansion and resilient retail/consumer spending. However, inflation and energy costs are creating headwinds to sentiment. While volumes should hold up near-term, the mixed economic signals suggest demand could soften if inflation accelerates or consumer confidence declines, so scenario planning for a 10-20% demand reduction is prudent.

Demand Planning

High Impact

May 2026 Freight Market: Rates Rising, Capacity Tightening Through Mid-Year

May 6, 2026

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The signal

The May 2026 State of the Industry Report from FreightWaves and Ryder reveals a freight market characterized by persistent capacity constraints and rising costs across trucking, maritime, and intermodal sectors. Spot and contract rates are climbing significantly—long-term contracts up approximately 8% since fall 2025—driven by elevated tender rejection rates and shippers increasingly turning to secondary capacity sources. This pricing pressure is expected to persist through mid-year as demand remains supported by returning manufacturing activity and sustained consumer spending.

The report highlights a bifurcated market dynamic: domestic intermodal is experiencing strong growth fueled by tight truckload conditions and attractive rate spreads, yet global ocean freight remains oversupplied despite routing disruptions and energy cost pressures complicating carrier economics. Diesel price sensitivity to geopolitical developments adds another layer of complexity, reinforcing the need for sophisticated cost and risk management strategies. S.

manufacturing has returned to expansion, supporting demand across flatbed, rail, and LTL segments, though broader economic mixed signals and inflation pressures create uncertainty for import planning decisions. For supply chain professionals, this snapshot signals a need for proactive capacity planning, diversified modal strategies, and heightened attention to fuel and geopolitical hedging. The elevated rejection rates suggest shippers should expect negotiations to remain challenging, and the shift toward contract rate increases indicates a structural tightening that will likely persist beyond mid-year for organizations without advanced demand forecasting and carrier relationship management.

#capacity-constraints

#rate-increases

#tender-rejection

#intermodal-growth

#freight-market-outlook

#contract-rates

#diesel-volatility

#manufacturing-recovery

#mid-year-forecast

#supply-chain-planning

Frequently Asked Questions

What This Means for Your Supply Chain

Simulation Suggestion

this month

What if tender rejection rates remain elevated through Q3 2026?

Model a scenario where carrier tender rejections stay above current levels through Q3 2026, forcing shippers to accept 15-25% higher contract rates or shift 20-30% of volume to secondary carriers with lower service levels. Assess impact on transportation spend, service reliability, and need for capacity hedging strategies.

Run this scenario

Simulation Suggestion

strategic

What if diesel prices spike 20% due to geopolitical disruption?

Simulate a sudden 20% increase in diesel prices triggered by a geopolitical event, with no corresponding fuel surcharge recovery from customers. Calculate cascading cost impact across truckload, intermodal, and LTL operations, and model required service level or network adjustments to maintain margin targets.

Run this scenario

Simulation Suggestion

this month

What if manufacturing demand accelerates faster than expected, straining flatbed and rail capacity?

Model a 25% surge in flatbed and rail demand driven by accelerated manufacturing expansion, assuming carrier capacity cannot keep pace. Assess impact on lead times, rates, and modal shift requirements. Identify alternative routing options, capacity partnerships, and inventory buffer strategies needed to protect service levels.

Run this scenario

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