Diesel Up 72% Is Devouring Truckload Carriers' Hard-Won Rate Gains

Diesel averaged $6.37 per gallon in October against $3.70 a year ago — a 72% jump — and that single cost line is consuming most of the 18% year-over-year increase in truckload contract rates before it ever reaches a carrier's bottom line. That is the unambiguous message of this earnings season, where J.B. Hunt, Werner and Heartland Express all posted double-digit revenue growth while profits barely moved.

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, Julie Van de Kamp said in a FreightWaves video update recorded Wednesday, October 21st.

"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," Van de Kamp said.

How much cost pressure are carriers actually absorbing?

Werner's pre-release flagged roughly $0.18 per share in cumulative cost headwinds tied to rising fuel prices and driver recruitment and retention. Heartland's results landed at an operating ratio of 98.7 — worse than the second quarter but meaningfully better than the third quarter of the prior year. CEO Mike Gerden cited rising fuel costs throughout the quarter, alongside 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.

The fuel math alone is brutal. Beyond the 72% year-over-year jump, diesel prices have climbed another 27% since July and peaked at roughly $6.53 per gallon in late September. The Sonar DTS index sits near a five-year high. And the pressure extends well beyond the pump: recruiting and onboarding drivers in a tight labor market carries its own heavy expense before any wage increase enters the equation.

For shippers, the commercial consequence is straightforward. Contract rates — already up 18% year over year — will need to keep climbing just for carriers to hold current margins. That implies continued upward pressure on truckload pricing into 2026 and beyond, with Heartland's 2027 horizon for full cost recovery marking how long management teams believe the repricing cycle will run.

Why is intermodal suddenly the bright spot?

Intermodal is emerging as the strongest relative winner in this market. J.B. Hunt's intermodal revenue rose 20% year over year with volume up, although revenue per load — up 11% on the surface — was only 2% higher once fuel surcharges are stripped out.

The Sonar Intermodal Cost Savings Index shows a 30% savings benefit from shifting freight from road to rail, a figure J.B. Hunt described as more than double what it has seen in some prior markets. For shippers weighing modal shifts, a 30% cost differential is a powerful economic signal — roughly 30 cents saved on every dollar of highway spend.

The bottleneck is drayage. Scarce capacity at both ends of the rail move is limiting how quickly that conversion opportunity can be captured, capping the pace at which the 30% savings can actually flow through shipper networks.

Is the truckload market still capacity-constrained?

Broader market indicators say yes. The Sonar STRI stands at 13.5%, still 5.6 percentage points above where it was a year ago when capacity first began exiting the market. The loaded outbound rail index for 53-foot containers is up 10% year over year.

J.B. Hunt's brokerage segment posted the most explosive numbers of the quarter: 57% revenue growth and a 22% increase in load volume, with revenue per load up roughly 29%. Even there, personnel and insurance costs partially offset the gains — a pattern that now runs through every segment of the company's results.

What comes next?

Knight-Swift earnings, expected Thursday, should provide the next data point on whether the squeeze pattern holds across the sector. With the STRI still elevated and diesel near multi-year highs, the trajectory points to contract rates continuing to chase costs upward into Q4 — and carriers hoping the race ends before fuel moves again.