RXO’s Q4 Curve Report Highlights Weak Freight Demand, Shrinking Capacity, and Cooling Spot Rate Momentum
RXO (NYSE: RXO), a leading provider of asset-light transportation and logistics solutions, has released the latest edition of its proprietary Curve truckload market forecast. This quarterly update offers a detailed evaluation of current freight market conditions, carrier capacity trends, macroeconomic drivers, and expectations for the upcoming quarter. The newest Q4 Curve report, which reviews third-quarter performance and examines the overall environment heading into the final months of 2025, reveals a market experiencing ongoing pressures, persistent volatility risks, and a noticeable deceleration in rate growth.
A Freight Market Under Strain
The report highlights that the trucking capacity environment has become more fragile than at any point in the past two years. Over the course of 2024 and 2025, numerous carriers—particularly small and mid-sized operators—have struggled under the weight of rising operational expenses, prolonged periods of low spot rates, tightening regulatory oversight, and uneven demand cycles. This combination of factors has led to a steady exodus of capacity from the market, leaving the industry more sensitive to fluctuations in freight volumes.
According to RXO, even a modest increase in demand, combined with ongoing capacity exits, could trigger significant freight rate volatility in 2026. This potential shift demonstrates how precarious the balance between supply and demand has become. With fewer trucks available and many carriers operating on narrow margins, any uptick in freight volume could place unexpected pressure on market prices.
Deceleration in Rate Growth Continued in Q3 2025
The Q4 Curve update presents a comprehensive look at truckload rate trends through the third quarter of 2025. While truckload rates continued to rise year-over-year, the pace of this growth slowed for the third consecutive quarter—a clear signal of a cooling trend.
Key findings include:
- Spot truckload rates increased 1.8% year-over-year in Q3 2025, a sharp decline from the 6.5% increase recorded in Q2 2025.
- The Q1 2025 increase had been even higher at 9.1%, showing that the rate of growth has steadily declined across all three quarters of the year.
- Despite the continued positive year-over-year growth, spot rates remain well below historical peaks, and the deceleration suggests limited short-term upward momentum.
- Market softness remains elevated, with shippers continuing to benefit from competitive pricing conditions, even as carriers reduce capacity due to financial strain.
This declining growth rate is a sign of ongoing caution in the freight industry—carriers are still struggling to regain pricing power, while shippers maintain leverage due to muted freight volumes and uncertain economic conditions.
Muted Freight Volumes Continue to Affect the Market
A core theme across the RXO report is the persistent stagnation in freight volumes. Despite periodic surges in certain sectors, overall demand has remained weak throughout much of 2024 and 2025.
Several factors have contributed to this muted demand environment:
- Weak consumer spending, particularly on goods, has limited the need for replenishment shipments.
- Lower discretionary income in many regions has shifted consumption patterns.
- Retailers and manufacturers have kept inventories tight, avoiding overstocking in an unpredictable economy.
- Global trade uncertainties, including tariff impacts and supply chain adjustments, have contributed to inconsistent freight flows.
RXO notes that while the upcoming peak season may bring some incremental uplift in freight demand, the overall outlook remains muted. The company does not expect a robust surge like the one experienced during earlier e-commerce booms, and instead anticipates modest, short-lived increases in specific retail categories.
Carrier Capacity Under Increasing Pressure
Carrier capacity remains one of the most critical variables affecting the freight market outlook. According to the report, trucking companies continue to face intense financial and operational challenges, particularly as low rates persist and margin pressures mount.
Several themes are highlighted in the report:
- Many carriers are contending with rising insurance premiums, maintenance expenses, and compliance costs.
- Small trucking businesses, which make up a large share of U.S. trucking capacity, have been disproportionately affected, leading to accelerated capacity exits.
- New federal regulations and enforcement actions have increased compliance requirements, adding further burdens on small operators.
- Some carriers have exited the market entirely, while others have reduced fleet sizes or consolidated operations to survive.
The result is a steadily tightening capacity environment. Although demand remains relatively soft now, this reduction in capacity could have significant repercussions once freight volumes begin to rise again.
RXO emphasizes that this shrinking capacity could ultimately reduce market flexibility, heightening the likelihood of pricing volatility in 2026, especially if economic conditions improve and freight demand rebounds.
Key Commentary from RXO Leadership
The Q4 Curve report includes insights from senior leadership within RXO, providing context on the broader trends and what they may signal for the coming year.
Corey Klujsza, Vice President of Pricing and Procurement at RXO, observed that the trends seen throughout the third quarter are consistent with those that have defined the past two years:The trends we’ve been seeing for much of the past two years continued in the third quarter, including muted freight volumes, waning carrier capacity, and low spot rates that haven’t been able to sustain any significant upward momentum,” Klujsza said.
His remarks underscore the ongoing imbalance between supply and demand—an imbalance that has minimized the opportunities for carriers to regain pricing leverage.
Jared Weisfeld, Chief Strategy Officer at RXO, expanded on the implications for the coming months and the risks associated with the fragile capacity outlook:
The near-term demand picture is consistent with our expectations for a muted peak season. Shippers are still contending with a tremendous amount of uncertainty, including weak consumer demand and lower consumption of goods,” Weisfeld said.
On the supply side, carriers are still under significant cost pressure from prolonged low rates, and recent regulations and enforcement are causing an acceleration in capacity exits. The capacity environment is more fragile than at any point over the past two years, and a modest spike in demand and/or the continuation of capacity exits could lead to rate volatility in 2026.
Weisfeld’s comments reinforce the dual concerns of weak demand and shrinking supply—conditions that could rapidly shift market dynamics if either variable changes unexpectedly.
While the remainder of 2025 may continue to reflect similar patterns—soft demand, slow rate growth, and ongoing capacity exits—RXO’s report makes clear that 2026 may be a different story. A sudden increase in freight demand, whether driven by macroeconomic recovery, consumer spending shifts, or manufacturing activity, could trigger significant upward pressure on rates due to limited available capacity.
This scenario sets the stage for potential pricing volatility, characterized by:
- Sudden spot rate spikes
- Greater competition for truckload capacity
- More significant divergence between contract and spot markets
- Increased pressure on shippers to secure reliable carrier relationships
RXO underscores the importance for companies across supply chains to monitor capacity trends closely, prepare for possible pricing fluctuations, and maintain flexible transportation strategies.
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