Q1 2026 Transportation Outlook

Truckload Spot & Contract Rate Forecast

What is the Beon™ Band?

The Beon™ Band combines year over year quarterly averages of spot and contract freight data to create a forecasted view of future freight cycles. It reflects the relationship between freight supply and freight demand, with demand shaped by macroeconomic indicators. When we overlay the Beon™ Band with a demand curve on one chart, we can see how demand affects to-the-truck costs.

TL Spot & Contract Cost Curve: %YoY Change by Quarter

_{Source: Beon Band – Transportation Insight Holdings}

Freight Rate Forecast

Spot Freight & Contract Rate Outlook

Linehaul spot rates ended 4Q25 slightly inflationary at +0.4% year over year. This shows the market has moved off the cycle bottom but has not yet entered a demand-led upcycle. Many shippers are still cautious. They see improving rate signals but remain unsure about end-market demand and possible policy-driven cost pressures.

As of early February 2026, carrier spot rates are running in the mid-teens above prior-year levels. This points to a much tighter network than usual for this point in the cycle. We expect this strength to ease into March as seasonal pressures fade. With that being said, we are increasing our forecasted rates for 2026, we expect spot rates to rise about 8.1% year over year, with a peak near +13.5% year over year in 4Q26 as gradual capacity erosion builds over time. We are maintaining our contract rates forecast of rates rising more slowly and are to peak near +5.5% in 4Q26. Faster capacity exits linked to rules on non-domiciled CDL holders and English language proficiency are shrinking effective supply while interest rate cuts and more normal inventory levels support steady, non-speculative freight demand.

“The freight market hasn’t become less cyclical; it’s become more insulated. Technology, pricing algorithms, and real-time visibility now absorb the smaller disruptions that once moved rates, forcing the system to require a much larger shock to change direction.

Today’s market still runs on supply and demand, but the adjustment happens quietly. Capacity tightens through policy, regulation, and friction long before it shows up in our statements. Rates rise not because of a single event, but from pressure beneath the surface.

The next true inflection won’t come from seasonality, but from a meaningful demand-side catalyst or a policy shock large enough to overwhelm the system. Those who succeed won’t be reacting to noise; they’ll be positioned for the moment when insulation gives way to impact.”

Port to Porch Market Forecast

Drayage Shipping

Many signs point to falling inventories for U.S. importers. For now, importers are keeping inventories lean while they wait for a Supreme Court ruling on the use of IEEPA to set tariffs in many parts of the world. A ruling in Q1 could create a window of opportunity for importers to bring in product and avoid tariffs that might raise duties by 20-to 50%.

The Chinese Lunar New Year is also forcing importers to make choices. Some are shipping only what they need to keep inventory levels stable before manufacturing and shipping pause for the holiday. According to SONAR, current volumes are the lowest pre–Lunar New Year levels since 2023. This year’s Lunar New Year runs from February 17 through March 3 and effects will continue through mid-March as Chinese ports and factories return to normal operations.

Current trends suggest that 2026 will not be quieter on the tariff front. Importers should continue to expect shifting trade agreements, changing tariffs ongoing uncertainty. Trade has become one of the main bargaining tools in U.S. foreign policy, which increases volatility for global supply chains.

Full Truckload Freight

FTL market conditions in 1Q26 remain soft, which reflects a market that is tightening without fully rebalancing. Tender rejection rates are holding around 13%. This shows moderate friction in the spot market, much of it related to winter storms, but it is still below the 15% or higher levels that usually mark a full cycle turn.

Spot rates are expected to be slightly lower year over year, at about –1.0%. This supports the idea that today’s firmness is more mechanical than demand driven. Contract compliance remains high as shippers continue to favor incumbent carriers and network stability over short-term spot exposure. This behavior suggests that shippers expect tighter conditions later in 2026, even though demand is still subdued in the near term.

Capacity exits are still taking place, but not fast enough to fully flip the market. As a result, the FTL sector enters 2026 in a seasonally stable but structurally oversupplied state. A meaningful demand catalyst will be needed to trigger a full market turn.

Less-Than-Truckload Freight (LTL)

The LTL market is stable but disciplined. Early signs of economic improvement and continued carrier focus on yield management are supporting this balance. For example, the January Manufacturing PMI moved back into expansion territory after a long period of contraction. This is an important signal for industrial activity, although it points more to stability than to rapid growth in freight demand.

The LTL Producer Price Index shows that inflation has eased from prior peaks but is still positive. This is consistent with what we see in the market. Pricing pressure is not as intense as it was before, but there has not been broad rate relief either. Carriers are still highly focused on network efficiency and pricing discipline.

FedEx Freight’s planned spin-off remains a key story to watch. As an independent company, FedEx Freight may have more freedom in how it invests in its network, manages capital and sets pricing strategy. The immediate effect on rates and capacity is likely to be limited, but FedEx Freight is the largest LTL carrier. Over time, any strategic shift could influence the broader LTL market.

In this environment, shippers that invest in freight accuracy, consolidation and strong carrier alignment will be in a better position to manage costs and maintain leverage. Proactive communication, reliable data discipline and close alignment with carrier networks will matter more as market conditions evolve.

Parcel Shipping

As we enter 2026 and review early industry forecasts, the parcel market remains focused on “better, not bigger.” Major carriers are prioritizing profitability, yield and network efficiency instead of pure volume growth.

A 5.9% General Rate Increase has been announced for 2026, but many shippers should expect total costs to grow faster. This is because of mid-year price actions, more accessorial fees, changes in zones and ongoing fuel surcharges.

Capacity is also tightening, which points to a more permanent structural shift.

FedEx is consolidating its Express and Ground networks. UPS is closing outdated facilities. Amazon is keeping more volume in-house and relying less on USPS. At the same time, regional carriers and alternative last-mile providers are steadily gaining market share, even with the high concentration among national players.

USPS is investing heavily in infrastructure and changing its parcel strategy. It has opened its last mile network to shippers of all sizes who are willing to pay for fast, front-door parcel delivery. This could reshape the competitive landscape by giving smaller shippers access to infrastructure that used to be dominated by Amazon and UPS.

USPS is also testing a bid-based and more transparent access model for more than 18,000 Destination Delivery Units (DDUs). The goal is to win billions in extra revenue and meaningful market share. However, this strategy comes with risks. Expanded access could cannibalize higher margin products like Ground Advantage and Priority Mail, create customer concentration issues and strain network capacity. These effects could offset planned revenue gains.

The basic pricing drivers have not changed. Weight, dimensions, zone, speed, fuel and surcharges still matter most. Contract structures, however, continue to evolve. Carriers are pushing for longer term agreements with tighter volume commitments and more restrictive termination language. As seen in 2025, carriers are also relying less on a single annual GRI and more on frequent surcharges during the year. These often relate to residential delivery, package characteristics, fuel volatility and peak demand.

Core Macroeconomic Metrics

Consumer Confidence

The Conference Board’s Consumer Confidence Index fell sharply to 84.5 in January 2026. This is lowest reading since May 2014, and well below the historical long-term average near 100. The decline reflects weaker views of both current conditions and future expectations. The Expectations Index, which captures outlook for income, job and business conditions, dropped well below key thresholds.

A sustained decline in confidence like this often signals that consumers will become more cautious with discretionary spending. If this trend continues, it could weigh on retail demand and the broader economy. Long periods of weak consumer sentiment are often linked to slower growth and can limit demand-driven freight activity in coming quarters.

EIA Diesel & Fuel Prices

U.S. crude oil production remains high and supports more stable fuel prices. According to the EIA’s January 2026 Short-Term Energy Outlook, U.S. output is expected to average 13.6 million barrels per day in 2025 and 2026, then ease slightly to 13.3 million barrels per day in 2027. Most of this strength comes from the Lower 48 and Permian Basin, which offset slower growth in other regions.

This steady production lowers the risk of fuel-driven freight inflation in 2026, unless there are major geopolitical events. Even though production growth is no longer accelerating, the U.S. supply backdrop is strong enough to limit sharp swings in diesel prices. This should create a relatively stable fuel cost environment for surface transportation.

Imports

Inbound ocean volumes into the U.S. are trending higher exiting January. Yet, despite steady outbound flows from China, current volumes are still the lowest pre-Lunar New Year build since 2023. This points to restrained front-loading by importers.

With Lunar New Year running from 2/17 through 3/3, volumes are expected to soften near-term as factories shut down temporarily. The lack of a strong pre-holiday surge suggests that inventories are better balanced and that demand signals remain cautious.

This pattern supports a controlled import environment. It is positive for network stability, but it is unlikely to create a large post-holiday demand surge across ports, intermodal or inland truckload markets.