Routing guides are crumbling as truckload contract rates set early in the 2026 bid season fail to hold, forcing shippers into mini-bid cycles and full book rebids amid a structural capacity crunch driven by regulatory enforcement, according to FreightWaves.
Spencer Frazier, head of sales and marketing at J.B. Hunt Transport Services, told investors at the Wells Fargo Industrials & Materials Conference in Chicago that tender rejections have surged, causing routing guides to fall apart at an accelerated pace from March through the present. “The only reason that happens is because routing guides, once implemented, start to crumble. They’re falling apart,” Frazier said.
The Regulatory Wave Reshaping Capacity
Heightened regulatory enforcement has been purging noncompliant drivers since last fall, with impact visible in the spot market around Thanksgiving when rates began climbing. Additional levers include strict policing of cabotage rules and the Supreme Court’s Montgomery v. Caribe Transport II ruling, which widened liability exposure for freight brokers found negligent in driver hiring. Frazier stressed, “It is different this time. Our customers are experiencing basically the increased enforcement of government regulations, and regulations that were existing, and a few new ones.”
Jim Filter, group president of transportation and logistics at Schneider National, echoed that the market’s turnabout stems from increased driver standards. He noted that in his experience, there aren’t 50,000 carriers in the country that can be vetted as safe, contrasting with recent years when brokers touted lists of more than 100,000 third-party carriers. Filter added that it will likely take “a couple of allocation events to recoup price” after a runup in nearly every operating expense.
Werner Enterprises management views the Montgomery ruling as a “net benefit” for its brokerage business, as shippers increasingly align with asset-based brokers that can guarantee trucks and driver compliance.
Rate Outlook: From Low-Single-Digit to Double-Digit Hikes
Most carriers raised bid season expectations during first-quarter earnings calls that ended in early May. They had targeted low- to mid-single-digit rate increases entering the year, but a tightening supply side now has them calling for mid- to high-single-digit increases, with some shippers seeing double-digit rate hikes. Schneider reported contract renewals at the highest level since 2021. J.B. Hunt flagged the likelihood of a cumulative 20% rate hike over the next two years at an investor conference last month.
| Market Dynamic | Previous Cycle (Gold Rush) | Current Cycle (Structural) |
|---|---|---|
| New entrant influx | High – oversupplied market | Low – kept at bay by regulatory/cost hurdles |
| Rate pressure | Downward after initial surge | Upward, likely sustained |
| Carrier vetting | Volume over compliance | Asset-based, compliance-focused |
| Broker liability | Low exposure | Increased due to Montgomery ruling |
Shipper Strategies in a ‘Different This Time’ Environment
Frazier emphasized that the ability for the industry to respond with an influx of new carriers as in past cycles “is just not going to be there.” The regulatory push, combined with cost hurdles including elevated equipment expenses, safety-driven insurance headwinds, and higher fuel prices, will likely keep new entrants at bay. For shippers, this means budgeting for sustained rate increases and reevaluating carrier partnerships.
Recommended actions for shippers and logistics managers:
- Adjust budget expectations to mid- to high-single-digit rate increases, with potential for double-digit hikes on some lanes.
- Prioritize asset-based carriers with strong compliance records, especially in light of the Montgomery ruling.
- Prepare for ongoing mini-bid activity and potential full-book rebids as routing guides continue to crumble.
- Vet carrier safety thoroughly, as the pool of compliant carriers may be significantly smaller than previously assumed.
“Based on our experience, there aren’t 50,000 carriers in this country that you could vet and say that they’re safe.” – Jim Filter, Schneider National
An increase in demand will likely be required at some point to sustain the current rate momentum, but the structural shift in capacity suggests that even without a demand surge, rates will remain elevated. The logistics industry is navigating a landscape where old cycles of oversupply no longer apply, and the foundations of routing guides are permanently altered.
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