Diesel and Truckload Rates Climb Together as Demand Stays Flat
Shippers are facing cost pressure from fuel and line haul rates at the same time. Breakthrough Chief Economist Marc Schaffer doesn’t expect either to let up in the near future.
By Ashley Prince | October 9, 2026
While freight demand has barely moved this year, freight costs are on the rise. This gap can be explained through the interconnected relationship between diesel prices, truckload rates, and capacity.
“We are absolutely in an elevated transportation cost environment,” Breakthrough Chief Economist Marc Schaffer said.
Diesel Has a Refinery Problem
Crude oil prices have dominated the news cycle for several months, but oil prices are not the only contributing factor in diesel’s current price surge.
The spread between crude oil and finished diesel, known as the crack spread, is at record levels. U.S. diesel inventories are hovering near five-year lows, and refiners ran at about 98% utilization in late September. U.S. diesel exports are also at record highs, as Europe pulled back from Russian supply.
According to Schaffer, even releasing the last 40 million barrels from the Strategic Petroleum Reserve would likely only have a marginal effect on diesel because refining capacity is responsible for the bottleneck.
A diesel export ban could bring short-term relief, but refiners running flat out may use the opening for overdue maintenance. This could tighten supply again, according to Schaffer.
Despite the current strain on refineries, refinding capacity is actually on the decline in the U.S. Two California refineries closed in fall 2025, and building a new refinery is a multiyear capital commitment.
Breakthrough’s current forecast has fuel prices elevated through 2027 before any real softening can begin.
Rates Step Up, Demand Holds Steady
Truckload spot rates have risen in two phases this year. The first came after winter storm Fern hit and knocked capacity offline in January. A second jump followed around May, when Roadcheck Week pulled high numbers of trucks off the road. Rates have held near the same level since, falling roughly in line with numbers seen in 2021.
In September, spot rates were up about 37% year-over-year, and contract rates were up about 29%.
Breakthrough’s shipper data shows volume remaining flat over the same period, meaning capacity is driving the increase. The Logistics Managers’ Index capacity reading has dropped below 50, which indicates tightening.
Carrier costs, excluding fuel, keep rising, and driver wages and benefits account for almost 60% of the total.
Enforcement is also limiting supply. Since the June 2025 English language proficiency policy change, roughly 1,400 to 1,600 drivers a week are flagged for violations. While only a quarter to a third are placed out of service due commercial border zones exemptions, the impact has been especially significant in border states.
A Split Demand Picture
Consumer sentiment, as measured by the University of Michigan, is near its lowest since 1978. The ISM Manufacturing Index, however, remains above 50. Data center construction spending also continues to climb, supporting flatbed carriers that haul the equipment.
Within Breakthrough’s shipper base, retail, paper, and packaging held volume up, assisted by tariff-driven pull-forward. General merchandise and discount retailers fared better than specialty stores. Overall, the outlook is persistent: Soft demand will likely continue, but numbers do not currently point toward a recession.
Where Shippers Are Finding Relief
“Shippers are really continuing to find ways to build resiliency in the face of a high cost environment,” Schaffer said.
Breakthrough is seeing several strategies among its shipper base, including:
- Improving fuel efficiency: Move a lane or two to carriers with better EPA SmartWay rankings.
- Finding better network fits: Breakthrough scores how well a carrier’s lanes overlap a shipper’s. Carriers scoring higher on that scale charged less because they ran fewer empty miles.
- Embracing intermodal: Rising truckload rates have renewed interest in intermodal, though service requirements limit where this approach works.
- Utilizing alternative fuels: CNG and RNG prices are steadier than diesel, but equipment costs push carrier rates up.
- Hedging: Interest has jumped over the past six months. Shippers typically hedge 20-25% of fuel spend for budget certainty, and Breakthrough can help shippers hedge by region.
What to Expect
Breakthrough expects spot rates to hold at their current level with seasonal swings, while contract rates keep repricing upward and converge with spot into 2027. When rates eventually fall, the floor will likely sit higher than before this cycle because operating costs are higher, according to Schaffer.
Schaffer also urged transportation teams to align with finance on budgets, since the market has moved faster than most annual plans.