The Freight Market Has Broken Its Own Rules

For decades, the freight market followed a predictable pattern: when demand increased, rates rose, and when demand softened, rates fell. This relationship shaped how shippers, brokers, and carriers interpreted the health of the economy. Today, that model no longer holds. The market isn’t behaving the way it used to, and most companies are still operating like it is. We are now operating in a market where rates are rising even as freight volumes remain flat or decline, and according to operators on the front lines, this isn’t a temporary anomaly, but a structural shift.

A Market That’s Not Following Its Own Rules

In a traditional cycle, rising transportation costs signal growth, more goods moving, tighter capacity, and increased demand. But that’s not what’s happening, and most of the industry hasn’t fully adjusted to that reality.

Instead, today’s market is defined by a disconnect: freight volumes are flat or even declining, while both spot and contract rates are rising rapidly, amid ongoing capacity constraints.

"It’s the exact opposite of what we’ve ever seen," says Joe Schulz, Owner of Schulz Logistics. "We’ve got declining volume paired with rising prices to move freight. That’s never been the case before."

From Schulz’s perspective, this divergence is forcing companies to rethink long-standing assumptions about how the freight economy works, and what pricing signals actually mean.

How the Industry Created Its Own Capacity Problem

From our perspective, to understand today’s conditions, you have to look at how the last four years unfolded. During the pandemic, supply chain disruption drove rates to historic highs, and capacity couldn’t keep up, prompting carriers to expand rapidly to meet demand. But as the market corrected, the pendulum swung too far. "Shippers pushed rates below the cost of operating a truck," Schulz explains.

"And when that happens, carriers don’t survive." The result was predictable but largely ignored. Carriers exited the market at record levels, profitability collapsed across the industry, and the overall capacity base shrank significantly. Then came another compounding factor: labor. "We don’t have a truck problem right now, we have a driver problem," Schulz says. "There are trucks sitting there. There’s just nobody to put in them." That distinction is critical. Unlike previous cycles, where capacity could be added by purchasing equipment, today’s constraint is tied to labor availability, a far more complex and slower-moving issue.

Why This Cycle Is Fundamentally Different

In past market cycles, rising rates triggered a predictable response: carriers added capacity, which stabilized pricing. That feedback loop is now broken.

Carriers are hesitant to reinvest after years of losses, driver availability remains constrained, and equipment supply is no longer the limiting factor.

"We’ve blown up capacity faster than the economy is growing," Schulz notes. "That’s why you’re seeing rates spike without demand increasing."

What we’re seeing is a new reality: rates are no longer a reliable indicator of economic strength; they reflect capacity disruption.

The Hidden Cost of Short-Term Optimization

Another driver of today’s volatility is the industry’s behavior during the downturn. As rates fell, many shippers focused aggressively on cost reduction, often pushing prices below sustainable levels. While effective in the short term, this approach created the exact conditions the industry is now struggling with. "They saved a penny today to spend two dollars tomorrow," Schulz says. "That’s exactly what’s happening now." This isn’t about assigning blame, it’s about recognizing how short-term decisions can reshape long-term market conditions. The takeaway is clear: an imbalanced ecosystem will eventually correct itself, often overcorrecting.

What This Means for the Industry

The current market shift is forcing a reset in how the industry operates, with several key implications for shippers, brokers, and carriers:

Volatility Is Here to Stay

Rates are moving faster and more unpredictably than in previous cycles.

"In some lanes, you can see swings of hundreds of dollars in a day," Schulz notes. "You just can’t rely on static pricing anymore."

Averages Are No Longer Enough

Traditional pricing strategies based on historical averages are breaking down.

Understanding when freight moves, not just where it moves, is now critical.

Visibility Is a Competitive Advantage

In a market this volatile, real-time visibility isn’t optional, it’s what actually determines who can make the right decisions.

Because the market is this volatile, having real-time visibility into lanes, pricing, and performance is what actually matters. That’s where Rygen’s X1 platform comes in, not as another tool, but as the infrastructure that makes that level of visibility possible.

"Technology won’t fix the market," Schulz says. "But it gives you the knowledge to navigate it better."

Relationships Matter More Than Price

As capacity tightens, access to reliable carriers becomes increasingly dependent on trust and long-term partnerships, not just transactional pricing.

The Role of X1: From Integration to Industry Impact

As the freight market becomes less predictable, a new layer of infrastructure is emerging as critical: intelligent integration.

Rygen’s X1 platform represents a shift from traditional automation tools to a true Integration Platform as a Service (iPaaS) purpose-built for logistics. Rather than simply connecting systems, X1 creates a unified operational layer that makes real-time visibility and decision-making possible, standardizing data, automating execution, and enabling real-time insight.

This shift has broader implications for the industry.

In a market where volatility is driven by structural constraints, not just demand, companies can no longer rely on static reporting or disconnected systems. They need the ability to interpret change as it happens.

That’s where X1 is having an impact:

• Providing real-time visibility into pricing and lane dynamics as they shift
• Removing delays that prevent teams from reacting to market changes
• Creating a single source of operational truth across fragmented systems
• Enabling faster, more confident decisions based on live data

"Freight has historically operated on disconnected systems and delayed feedback loops," said Matt, Product Lead for X1. "What we’re doing with X1 is fundamentally changing that, giving teams a real-time, connected view of their operations so they can respond to market shifts as they happen, not after the fact."

As more brokerages adopt this model, the competitive advantage is shifting from those who can execute transactions faster to those who can understand and adapt faster.

From Automation to Understanding

While much of the industry focuses on automation and efficiency, what we’re seeing is that those aren’t the real differentiators anymore, understanding is. For Schulz, working with Rygen has been less about adding tools and more about gaining meaningful insight. "The biggest value isn’t just time savings, it’s understanding," Schulz explains. "We can see what’s actually happening in our business at a granular level. That helps us make better decisions." This distinction is critical. In a market where conditions shift daily, the ability to interpret data, not just collect it, is what ultimately drives performance.

A Reset for the Industry

The freight market is entering a new phase, one that challenges long-held assumptions and exposes structural weaknesses. It is no longer enough to rely on historical patterns, optimize purely for short-term cost, or treat capacity as an unlimited resource. Instead, the industry is being pushed toward greater collaboration, more transparent pricing dynamics, and smarter, data-informed decision-making.

Final Perspective

For the first time in decades, the freight market is behaving in a way that demands a fundamental rethink. Rates are rising, but not because demand is booming; they’re rising because capacity has been disrupted at its core. "It’s a different world right now," Schulz says. "And people are going to look back on this in 10 years and study it, because we haven’t seen anything like it before." In this environment, the companies that continue to operate on outdated assumptions will fall behind, and the ones that succeed won’t be the ones applying outdated models, but those that recognize the shift and adapt to it.

FAQ

Why are freight rates going up when demand is flat?

Because the constraint is capacity rather than demand. Rates were pushed below the cost of operating a truck, carriers exited the market at record levels, and the capacity base shrank significantly. With volumes flat or declining, a smaller carrier base is still enough to push both spot and contract rates up.

Is the driver shortage or the truck supply causing tight capacity?

Drivers. As Joe Schulz describes it, there are trucks sitting there with nobody to put in them. That matters because in previous cycles capacity could be added by purchasing equipment, while a labor constraint is far more complex and slower-moving, so the pressure on rates lasts longer.

What is an iPaaS in logistics?

An Integration Platform as a Service connects the systems a logistics operation runs on. Purpose-built for logistics, as with Rygen’s X1, it goes further than connection: it standardizes data, automates execution, and creates a unified operational layer so teams can see pricing and lane dynamics as they shift.