Dive Brief:
- Shippers are changing when and how to procure freight capacity as they seek reliability over costs, Knight-Swift Transportation Holdings executives said during a Q1 earnings call last week.
- Shippers are favoring asset-based carriers due to regulatory enforcement efforts, such as strict English language proficiency enforcement, that limit market capacity, CEO Adam Miller said in the call.
- Mini-bid activity has also increased, reflecting that trucking firms are unable or unwilling to move freight at existing rates, Miller said.
Dive Insight:
Shippers are shifting their freight strategies as the trucking market faces higher rates and tight capacity stemming from regulatory enforcement efforts.
Compared to previous years, some shippers are issuing bids off cycle not to improve service or lower prices, but to secure capacity, Miller said. Off-cycle and mini-bids give shippers an opportunity to reassess their freight services, to respond to sudden changes in the market and trucking capacity, per a report from DAT.
Shippers are already discussing peak season capacity “which is not typical this early in the year,” Miller added.
At one point, customers had to move goods regardless of cost because demand was so high, Miller said. In turn, “I think they’re going to have a bias towards asset-based carriers. I mean, we’re already starting to see that,” he said.
Knight-Swift is already seeing shippers restrict some bids to asset-based carriers and are “limiting the percentage that they will allow in terms of brokers to participate in a bid. And I think that's going to continue,” he said.
At the same time, major spot market discounts have since evaporated, Miller said. This has encouraged shippers to align with quality asset capacity, he said.
On the other hand, shippers are also facing bids rejected by awarded carriers, Miller said. Changes in the market or shifts in networks have moved rates beyond what was proposed a month or two ago, leading to bid rejections. Tender rejection rates remained at a noticeably high rate of above 14% for parts of this year, according to an April joint report from Sonar and Ryder System.
The change in capacity follows a yearslong freight downturn in the trucking industry that prompted players to leave the market, along with regulatory pressures that have sprung forward in 2025 and 2026. For instance, last year President Donald Trump ordered federal transportation officials to make English proficiency violations an out-of-service criterion. The Federal Motor Carrier Safety Administration also rolled out a new policy on how roadside inspections should be conducted.
These changing market dynamics are tipping rate negotiations into the favor of trucking firms such as Knight-Swift, Miller suggested. “As we navigate a busy and rapidly evolving bid environment, we have shifted our bid targets to a range of high single to low double-digit percentage increases,” he said.
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