Truckload Pricing Power? Diesel Is Eating It Up

Truckload rates are up, but carrier profits still aren’t following. JB Hunt, Werner and Heartland earnings all point to the same freight market story: pricing power is back, but diesel, driver and insurance costs are eating the gains. In this update, we break down what the latest earnings say about truckload and intermodal, why road-to-rail conversion is accelerating, and how SONAR data backs it up. Key numbers include diesel up 72% year over year, contract rates up 18%, and intermodal showing a 30% cost savings benefit versus highway in today’s market.

Truckload carriers are posting double-digit revenue growth this earnings season, but a 72% year-over-year surge in diesel prices is consuming most of those gains before they reach the bottom line. The dynamic, playing out across results from J.B. Hunt, Werner, and Heartland Express, signals that contract rates — up 18% year over year — will need to keep climbing just for carriers to hold margin.

J.B. Hunt’s third-quarter results offer the starkest illustration. Operating revenue climbed 24%, driven by stronger pricing, an 8% increase in intermodal loads, and higher broker volumes. Yet net earnings rose only 1%, with driver-related expenses, fuel costs, and insurance claims absorbing nearly all of the revenue gain, said Julie Van de Kamp in a FreightWaves video update recorded Wednesday, October 21st.

Werner’s pre-release told a similar story, flagging roughly $0.18 per share in cumulative cost headwinds tied to rising fuel prices and driver recruitment and retention. Heartland’s results showed an operating ratio of 98.7 — worse than Q2 but meaningfully better than Q3 of the prior year — with CEO Mike Gerden citing rising fuel costs throughout the quarter, plus inflation in maintenance, repairs, and other employee-related expenses. Heartland is now looking toward 2027 to realize contract rate increases sufficient to offset those pressures.

“Truckload has pricing power on paper. We’re continuing to see those rates increase, but fuel, driver costs, and claims are really kind of cashing those checks before drivers do,” said Julie Van de Kamp.

Diesel averaged $6.37 per gallon in October versus $3.70 a year ago — a 72% jump — and peaked at roughly $6.53 in late September. Prices are also up 27% since July alone. With the Sonar DTS index sitting near a five-year high, the cost pressure extends beyond fuel itself: recruiting and onboarding drivers in a tight market carries its own heavy expense even before wage increases are factored in.

Intermodal is emerging as a relative bright spot, though it faces its own constraints. J.B. Hunt’s intermodal revenue rose 20% year over year and volume was up, but revenue per load — up 11% on the surface — was only 2% higher when fuel is stripped out. The Sonar Intermodal Cost Savings Index shows a 30% savings benefit from switching road freight to rail, which J.B. Hunt described as more than double what it has seen in some prior markets. The bottleneck is drayage: scarce capacity at both ends of the rail move is limiting how quickly that conversion opportunity can be captured.

Broader market indicators reinforce the capacity-constrained backdrop. The Sonar STRI stands at 13.5%, still 5.6 percentage points above where it was a year ago when capacity first began to exit. The loaded outbound rail index for 53-foot containers is up 10% year over year. J.B. Hunt’s brokerage segment posted 57% revenue growth and a 22% increase in load volume, with revenue per load up roughly 29%, though personnel and insurance costs partially offset those gains as well. KNX earnings, expected Thursday, should provide the next data point on whether the pattern holds across the sector.

• Diesel averaged $6.37/gallon in October, up 72% year over year, eroding carrier contract rate gains of 18% and leaving J.B. Hunt’s net earnings up just 1% despite 24% revenue growth.
• Sonar’s Intermodal Cost Savings Index shows a 30% road-to-rail savings benefit — more than double prior market levels — but drayage scarcity is limiting conversion volumes.
• The Sonar STRI remains at 13.5%, still 5.6 percentage points above year-ago levels, confirming the truckload market remains capacity-constrained heading into Q4.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.