The spot market is suddenly on fire, and one analyst says it’s the first time in about four years that it would be considered tight.

That’s good news for truckers reliant on spot market freight, but they are also coping with sharply higher diesel prices. How much of the spot market increase is driven by fuel costs and how much is reflective of stronger freight fundamentals? Let’s find out.

Spot market tight for ‘first time in about four years’

ACT Research indicates in its Freight Forecast: Rate and Volume Outlook report, that spot market rates are keeping pace with rapidly rising diesel prices as the war in the Middle East drags on.

“Since there is generally no fuel surcharge in the spot market, it’s remarkable that spot rates have risen about as much as fuel costs in the past few weeks,” said Tim Denoyer, ACT Research’s vice president and senior analyst.

“Diesel costs spiked 25-30 cents per mile for truckload fleets, which typically comes out of the spot market trucker’s pocket. But, with a lot of marginal fleets on the edge, the jump in diesel prices tightened capacity almost immediately, with spot dynamics tightening through March, demonstrating a tight market for the first time in about four years.

“The extra $1.50 per gallon is a new capacity constraint on the truckload market. The truckload rate outlook has risen as tighter driver and equipment availability drive spot market momentum, with a few signs of improving demand.”

Supply-demand balance hits 4.5-year high

Meanwhile, ACT reports in its For-Hire Trucking Index that the supply-demand balance has hit a 4.5-year high in February, as volumes increased and capacity contracted.

“While rate gains may ease as the weather improves, FMCSA nondomicile actions should tighten the driver supply further, and as private fleets contract, for-hire demand should improve solely on the return of market share that was ceded between 2022–2025,” said Carter Vieth, research analyst with ACT Research. “The ending of IEEPA tariffs and the impermanent nature of Section 122 tariffs may help to lay the groundwork for improved inflation and some restocking, but higher oil prices may cancel out those tailwinds.”

For-hire volumes are benefiting from slower private fleet growth, Vieth said, putting more freight into the for-hire market. However, he cautioned rising fuel prices could dampen consumer-driven freight demand.

Spot rates continue to climb

Truckstop.com and FTR Transportation Intelligence reported strong gains in spot market rates for the week ended March 20, however that’s partly driven by higher fuel prices.

Reefer and flatbed rates rose sharply, the former largely because of Easter holiday demand but the jump was greater than usual for the week.

 “A larger factor might be the need to offset rising fuel costs for refrigerated trailer units,” Truckstop.com reported. “Overall dry van spot rates eased slightly, but regional variations again were quite large as spot rates for loads originating in the Midwest, which had powered dry van rates during the week ended March 13, gave back much of the prior week’s increase while most other regions recorded rate increases of more than 10 cents a mile.”

Even though the latest increases are likely driven by rising fuel prices, Truckstop.com notes they remain above year-ago levels even when factoring in the influence of diesel costs.

“Although carriers operating in the spot market typically do not receive surcharges, the calculation serves as a proxy for the portion of the rate needed to offset higher fuel costs. Based on the retail diesel price, carriers’ fuel costs over two weeks have risen by nearly 17 cents a mile at 7 mpg, or nearly 20 cents a mile at 6 mpg,” the company reports.

With a small increase in load postings and flat truck postings, the Market Demand Index ticked up to 172.2, which is the highest level in just over four years.