Surface Transportation

quarter , while its dedicated operating margin was 10.8 %, according to quarterly earnings data .

The higher margin is in the difference between dedicated and traditional truckload .

“ When we ’ re putting together a dedicated solution ; it ’ s truly dedicated ; it is a multiyear agreement ,” James Filter , group vice president of transportation and logistics at Schneider , said during its earnings call . “ It ’ s structured so that it has teeth in it for both sides and is not something that is going to be replaced by lower-cost spot pricing .”

Allocating more capital to dedicated trucking as well as to less-than-truckload ( LTL ) services is the strategy Phoenix-based Knight-Swift Transportation Holdings is pursuing to reduce its dependence on the volatile one-way , irregular-route truckload market .

Knight-Swift ’ s truckload segment currently operates 15,800 irregular-route trucks and 6,400 dedicated trucks across its truckload subsidiaries , which include Knight and Swift Transportation as well as Barr-Nunn , Abilene Motor Express and U . S . Xpress .

“ We ’ re going to build our dedicated fleet ,” CFO Andrew Hess said during a Jan . 22 earnings call . Knight-Swift looks to boost dedicated operations at U . S . Xpress , which it acquired in 2023 for $ 808 million . “ We believe [ dedicated ] has an opportunity for growth ,” Hess said .

“ It has teeth in it for both sides and is not going to be replaced by lower-cost spot pricing .”

J . B . Hunt Transport Services President and CEO Shelley Simpson , in a Jan . 16 earnings call , called the company ’ s dedicated service “ remarkably resilient ” despite the freight downturn . J . B . Hunt puts the value of the overall dedicated trucking market at $ 90 billion .

J . B . Hunt ’ s dedicated business did come under pressure as truckload spot rates dropped by double digits from 2022 through 2024 . That pricing collapse gave some shippers an opportunity to shift more expensive dedicated business to the open market .

“ We certainly combated that challenge throughout the year ,” Bradley W . Hicks , J . B . Hunt ’ s president of dedicated contract services , said during the earnings call . He expects pressure from “ fleet losses ” to continue through the early part of the second quarter .

After that , however , Hicks sees a clearer road to growth ahead . “ We see our retention rates on customers rebounding ,” with more trucks in demand , he said .

Schneider also expects rising demand will allow it to deploy more dedicated trucks in 2025 .

“ We have line of sight to several hundred trucks of new business awards slated for start-up in the first half of 2025 ,” Rourke said .

The CEO said Schneider has “ trucks at the ready ” for a few large startups that were delayed from 2024 into 2025 .

US intermodal savings remain well above historical norms

By Ari Ashe

Despite rising rail rates in Southern California , intermodal shippers saved more than 20 % on average compared with truckload on one-off business across the US in the fourth quarter , the third consecutive quarter in which spot market savings far exceeded historical norms , according to the February edition of the Journal of Commerce Intermodal Savings Index ( ISI ).

While intermodal savings dwindled on short-haul lanes shorter than 1,200 miles , the national savings grew due to higher rebates to use rail on lanes longer than 1,200 miles .

The Spot ISI averaged 121.0 , down from 122.3 in the third quarter but up from 117.4 in the fourth quarter of 2023 . The fourth-quarter 2024 average is also higher than the 10-year spot ISI average of 114.8 .

Average truckload spot rates rose to $ 2.02 per mile by the end of December , up from $ 1.94 per mile in September , while intermodal spot rates rose to $ 1.63 per mile from $ 1.61 per mile over the same period . Spot intermodal rates in the fourth quarter were the lowest for that three-month period since 2019 .

Although spot intermodal rates rose out of Los Angeles because of peak season surcharges , truckload rates climbed simultaneously , negating any impact on cost differential between rail and truck .

The Contract ISI , meanwhile , averaged 126.5 in the fourth quarter , up slightly from 126.1 in the third quarter and 126.2 in the fourth quarter of 2023 . Domestic intermodal shippers have saved between 25 % and 28 % across the US since January 2023 compared with truckload .

Contract truckload , intermodal rates sputtering in early 2025

Average contract rates for US truckload and intermodal rail , in USD per mile

USD per mile

$ 2.5

$ 1.0 $ 2.0

$ 1.8

$ 1.5

Jan L 2023

Jul Jan 2024 Jul Jan Jan , 2025 2025

JOC Contract Truckload Shipper Rates

JOC Contract Intermodal Shipper Rates

L email : bill . cassidy @ spglobal . com

Source : Journal of Commerce Intermodal Savings Index

© 2025 S & P Global

60 Journal of Commerce | March 3 , 2025 www . joc . com