Spot freight rates are running 40% to 70% above contracted lane rates, making traditional waterfall routing guides effectively unenforceable, according to Brian Riley, VP of National Account Sales at RXO. Riley made the remarks during a FreightWaves interview at the Univar Solutions Carrier Kickoff Event in Chattanooga, Tennessee, where 60 to 70 carriers gathered for an annual supplier conference.
The Fragmented Lane Challenge
Riley identified the growing "tail" of small, infrequent shipments — lanes moving fewer than 5 to 20 times per year — as the primary stress point in shipper networks. Contract awards on these lanes, often locked in months earlier, carry almost no chance of being honored when a truck is finally needed. "Spot was a slight premium. Now acceptance being lower, spot is 40%, 50%, 60%, sometimes 70% higher than what you thought your contract rate was going to be," Riley said. "But it’s a paper rate that’s never going to be honored."
| Metric | Value |
|---|---|
| Spot rate premium over contract | 40% – 70% higher |
| Infrequent lane volume threshold | Fewer than 5–20 shipments/year |
Restructuring Carrier Awards
Riley's recommended fix: move away from a single high-volume primary award paired with a tail of marginal lanes, and instead restructure into multiple primary awards with adjusted percent allocations across carriers. He also pointed to proactive rate increases as a tool some shippers are already using. Customers who voluntarily offered contract increases to offset rising rejections and spot exposure were able to secure greater carrier commitment — though Riley was direct that the move carries a firm service expectation in return.
Technology and Network Investments
On the technology side, Riley highlighted RXO’s investment in automated spot processes, including indexed or cost-plus models and staging dedicated power-only equipment on customer yards exclusively for spot coverage. He also credited the 2023 Coyote acquisition with expanding RXO’s carrier network into industries and markets where the two companies had limited prior overlap, providing both consistent coverage and surge capacity.
Riley described RXO’s carrier retention strategy as centering on the RXO Extra program, which offers drivers fuel discounts, tire benefits, and maintenance support — programs he said are especially impactful for smaller carriers facing soaring fuel costs. The goal is straightforward: give carriers a concrete reason to prioritize RXO freight when capacity is tight and tiebreakers matter. "Win the tiebreak" is the internal framework Riley uses when coaching his team: if price and service metrics are equal among a room of 60 to 70 providers, relationship and reliability determine who gets the load.
Shipper Implications: Becoming a Shipper of Choice
Riley emphasized that carriers are an extension of the shipper's brand. "Our carriers are an extension of our brand, of our business. You’re not just signing up to perform a task or a contract award. You’re really signing up to be and represent that customer and obviously your own reputation as well," he said. Shippers with routing guide failures can access capacity resources at rxo.com/capacity. The key takeaway: shippers who invest in carrier relationships and offer competitive rates will secure capacity when the market tightens.
Watch List
Riley flagged an upcoming RXO quarterly state-of-industry webinar scheduled for August 25, to be led by Chief Strategy Officer Jared Weisfeld and Corey Klusia. The session will feature the Coyote Curve along with market forecasts and projections. RXO’s quarterly earnings announcement was also described as imminent at the time of the interview. Shippers should monitor these events for updated market intelligence and capacity outlooks.
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