Record Diesel Prices Put Pressure on Carrier Costs

Key Trends

Spot volume is still positive but growth has slowed
Market conditions remain strong despite fuel costs
Rate outlook strengthens

Monthly News

Diesel prices surged to record highs in September, peaking at $6.529 per gallon for the week ending September 21, more than 70 cents above the previous record. Although prices retreated nearly 15 cents the following week, the national average remained nearly 64% higher than at the beginning of March, offering little meaningful relief. With crude oil prices remaining above $90 per barrel amid uncertainty surrounding the Iran conflict and distillate inventories running low, further price declines remain uncertain. For the freight market, sustained diesel costs could put additional pressure on carrier capacity and operating expenses, while potentially offsetting some of the recent gains in freight rates as shippers and carriers adjust to higher transportation costs.

Market Trends

Supply Update

Truck utilization is expected to remain elevated at 99% through Q3, easing only slightly to 98% in Q4 and 96% by Q2 2027, signaling continued capacity constraints. Meanwhile, the September Logistics Managers’ Index fell to 34.40, with readings below 50 indicating significant capacity contraction. Despite strengthening rates, it remains uncertain whether carriers will add capacity, particularly amid increasing pressure on foreign drivers.

Demand Update

Spot volumes remain stable and modestly above comparable 2025 levels, while flatbed growth has moderated to match last year’s levels. Tender rejections remained relatively unchanged month over month at 12.97%, despite a 1.17% increase. FTR raised its 2026 truckload growth forecast to 1.6%, with 2027 projected at 1.9%. Dry van and refrigerated forecasts remain steady at +1.8% and +1.7%, respectively, for 2026, while flatbed remains the strongest segment at +4.4%, supported by building materials.

Rate Update

FTR increased its 2026 truckload rate forecast to +19.7% year over year, excluding fuel surcharges, up from +18.3% previously. The spot rate outlook remained largely unchanged, while contract rates increased to +12%. All equipment types are expected to see stronger rates, with dry van projected to experience the largest gains. Overall, truckload rates are forecast to increase 18%–21% across equipment types in 2026, followed by additional gains of 8%–11% in 2027 as the total truckload rate forecast rises to +10.1% year over year.

Market Forecast

The truckload market continues to show signs of tightening capacity and rising transportation costs heading into the final quarter of 2026. Active truck utilization remains elevated at 99% in Q3, with forecasts indicating limited relief through 2027, while tender rejections held relatively steady at 12.97%, reflecting continued pressure on available capacity. Spot volumes remain modestly above 2025 levels, and FTR has raised its 2026 truckload rate forecast to +19.7% year over year, with further increases expected in 2027. Diesel prices added another layer of uncertainty in September, surging to a record $6.529 per gallon and significantly increasing carrier operating costs. While freight volume growth remains moderate, tight capacity, stronger rate expectations, regulatory pressures, and fuel price volatility point to a challenging transportation environment for shippers through the remainder of the year.

Life At Axle

SCM 430 Final Presentations

After seven weeks at Axle, Global Supply Chain Institute at the University of Tennessee SCM 430 students wrapped up the classroom portion of their experience with SMART goal presentations highlighting what they learned along the way. Throughout the course, students gained real-world exposure to logistics, built industry knowledge, developed professional skills, and learned how to set clear, actionable goals. We’re proud of the growth, effort, and confidence these students have shown throughout the experience. For those transitioning into Axle internships for the remainder of the semester, they’ll have the opportunity to build on what they’ve learned, gain hands-on experience with their teams, and continue learning alongside their team leads.

Axle Impact

Oktoberfest

The Axle team came together for our 5th Annual Oktoberfest, a night centered on having fun while giving back to the East Tennessee community. This year's event supported the Boys & Girls Clubs of the Tennessee Valley, with fundraising taking place throughout the night and in the weeks leading up to it, including our Dunk Tank and Margarita Fundraiser. Thanks to our team's contributions and Axle's matching efforts, $36,000 was donated to the Boys & Girls Clubs of the Tennessee Valley. These funds will help support programs and experiences that give local youth the opportunity to learn, grow, build confidence, and reach their potential.

Did you Know?

Before Halloween candy hits the shelves, months of supply chain planning happen behind the scenes. Candy manufacturers forecast demand, plan production, and coordinate transportation to make sure stores are stocked in time for Halloween. Americans are expected to spend $4.1 billion on Halloween candy this year, with 96% of Halloween shoppers planning to buy it. From production to the store shelf, careful planning and coordination keep Halloween candy moving through the supply chain and ready for October 31st.