Diesel freight contract rates climb to 274, highest since the freight recession ended

Contract truckload rates have climbed to an index reading of 274 on a seasonally adjusted basis, the highest since the freight recession ended, according to Craig Fuller's read of SONAR data at FreightWaves. That is well above where rates stood the prior two years. For jobbers moving product out of the rack, it means your delivered cost of hauling is going up whether or not your gallons are.

The rate climb

Shippers are locking in higher committed rates. Spot rates are trending up toward peak, and tender rejections are part of what is pushing them. The thing Fuller flags, and it matters, is that demand is not the primary driver of current volume. Freight is moving, but the market is still hunting for a peak-season catalyst that has not shown up.

Branded supply already carries a few cents of premium over unbranded at the rack. The haul cost stacks on top of both, so the spread between them does not move just because trucking got dearer.

The part worth watching is the gap between rising rates and soft demand. When carriers raise committed rates into a market that is not actually short on freight, the rates can hold through a contract cycle even if spot softens later. That locks in your cost for the term.

Japanese tankers skip Hormuz

Several Japan-owned or Japan-bound tankers are back in the Middle East for crude, but none are going through the Strait of Hormuz, per Bloomberg reporting cited by OilPrice.com. They are picking up cargoes through ship-to-ship transfers offshore Oman or at Fujairah, in the Gulf of Oman, staying outside the strait.

That is a foreign buyer's routing decision, and on its own it does not touch a US rack. It matters here only as a tell on risk. Tankers paying for STS transfers to avoid the strait means the market is still pricing in Hormuz disruption risk left over from the Iran war. That risk premium rides in the crude benchmark that sets your replacement cost. If the strait stays open and quiet, that premium could ease.

What to watch

Whether contract freight rates hold at 274 or back off once the market accepts there is no peak-season surge coming. And whether Hormuz routing normalizes. If tankers start transiting the strait again, the geopolitical premium in crude could soften, which would help your landed cost at the terminal.