Q&A

What fuel prices mean for your future freight rates

Arrive Logistics' market intelligence VP on the fuel data that tells you where freight is headed

We know what's happening in the moment: diesel prices are high, cash flow may be tight. But what happens in the next 30 to 90 days—and how do you prepare now for success in the future?

David Spencer, VP of market intelligence at Arrive Logistics, closely tracks crude prices, diesel supply, freight rates and much more. He shares his perspective on what to expect in the coming weeks and how to strategically plan your business for what's next.

—Interview by Shefali Kapadia, edited by Bianca Prieto

What data are you watching most closely right now to understand how oil prices are impacting carriers?

It starts with diesel prices at the pump because that’s what directly hits carriers’ wallets and what drives fuel surcharge revenue on the other side. That said, pump prices are a lagging indicator, so we’re also keeping a close eye on crude and refined diesel supply levels because they give you an earlier signal of where things might be headed.

How quickly do changes in diesel prices show up in freight rates? Why isn’t it immediate?

It depends on the type of freight. On the contract side, where you’ve got pre-negotiated fuel surcharge programs, there’s not much lag as it adjusts pretty quickly.

Spot is a different story because fuel is baked into the all-in rate, so it doesn’t move overnight. In this market, though, we’ve seen increases flow through in about twp to four weeks, which is relatively fast. A lot of that comes down to tighter conditions, giving carriers more leverage. In a softer market, that timeline would stretch, or you might not see much movement at all.

If diesel prices fall faster than expected, what does that mean, especially for smaller carriers?

The first is simple: their costs go down. The interesting part is what happens next. If rates take a little longer to adjust (which they usually do), there’s a window where carriers can see improved cash flow. For smaller operators, even a short period like that can make a big difference.

Right now, is it smarter to lean into spot or contract freight?

It really depends on your setup. If you’re a carrier with flexibility, this is a good spot market to be in, especially heading into peak season, because there’s real opportunity to earn.

However, if you zoom out a bit, contract freight is what brings stability. If you can build consistent, profitable freight over time, you’re going to smooth out a lot of the volatility. From a market standpoint, spot leads and contract follows. And once contract rates move up, they tend to stay elevated longer—they rise fast and fall slow.

What should executives at small carriers expect over the next 30 days? And the next 90 days?

The next 30 days drop us right into the heart of peak season. We’re expecting tight capacity, a lot of spot rate movement and strong earning opportunities for carriers that are ready to run.

Over the next 90 days, it’s still a positive outlook overall, but there’s more uncertainty. A lot depends on how fuel prices and the broader economy shake out. Our base case doesn’t call for rates dropping off, but this is a pretty fluid environment. What does feel more durable is the increase we’ve seen in linehaul rates. Even if fuel comes down and all-in rates follow, that underlying pricing strength should stick.

What’s your advice to small fleet owners trying to plan through all this uncertainty?

Flexibility is key right now. There’s a real opportunity to take advantage of spot market strength in the short term. At the same time, it’s a good moment to build relationships by delivering strong service, pricing fairly and turning those spot moves into more consistent, long-term freight.

That balance between short-term upside and long-term stability is what sets you up to handle whatever comes next.

Inside Lane's Take

The carriers who come out of this stretch ahead won't be the ones who guessed right on diesel prices. They'll be the ones who used the spot market's strength now to build relationships that convert into consistent contract freight later. Spencer's framework is worth writing down: spot leads, contract follows, and once contract rates move up they tend to stay elevated. That sequence is already in motion.

(Image courtesy David Spencer)