RXO's Curve report predicts weak Q4, but expects improvement in 2026

According to RXOs latest Curve report, truckload activity is projected to stay subdued through the fourth quarter, with a potential recovery on the horizon in 2026. RXO acquired the Curve report from Coyote Logistics last year, continuing its market analysis tradition.

The report highlighted that while October and November saw gains compared to last year, spot rates are expected to remain largely flat, showing little movement in either direction. RXO noted, This cycle peak may differ from historical patterns possibly experiencing mild deflation without reaching a significant trough but we expect a more traditional peak to return by 2026.

Market Pressures and Demand Dynamics

Various factors, including shifts in U.S. trade policies, enforcement of CDL requirements for non-resident drivers, and language proficiency rules, are placing pressure on the trucking sector. Demand continues to be a key concern. While disruptions in supply could alter the market fundamentally, experts emphasize that overall demand remains the critical driver.

Manufacturing Weakness Impacts Freight

Manufacturing, a major freight source for trucking companies, remains considerably below its 2007 levels. Federal Reserve data shows that industrial production output in manufacturing has fallen nearly 7.8% since 2007, and when high-tech goods are excluded, the decline reaches 15.6%.

RXO pointed out that the New Orders component of the Manufacturing PMI, a strong leading economic indicator, had been rising for five consecutive months before dipping in July. It briefly recovered in August but declined again in subsequent months. Novembers PMI survey indicated new orders contracted for the third month in a row, with primary metals being among the few sectors showing growth.

Monetary Policy Support

Sluggish manufacturing has received some relief from monetary policy. The Federal Reserve lowered the federal funds rate by 0.25 percentage points, marking the third reduction this year. The Federal Open Market Committee stated that economic activity is improving moderately, though uncertainty remains elevated.

RXO observed that continued interest rate cuts could stimulate the manufacturing index by lowering capital costs, encouraging business investment and expansion.

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• RXO’s Curve report projects lackluster Q4, improvement in 2026