Brian Riley, VP of National Account Sales at RXO — one of the largest freight brokerages in North America — says spot freight rates are currently running 40% to 70% above contracted lane rates, rendering many traditional routing guides ineffective. The spread between spot and contract rates is a cyclical feature of freight markets, but a gap of this magnitude signals a meaningful tightening in truckload capacity. Speaking during a FreightWaves interview at the Univar Solutions Carrier Kickoff Event in Chattanooga, Tennessee, Riley outlined how shippers can restructure their networks, strengthen carrier relationships, and leverage technology to navigate a tight capacity market.

The event brought together approximately 60 to 70 carriers for an annual supplier conference that Riley described as his third consecutive year attending. He praised the format, noting that having all providers in one room with access to stakeholders across the organization creates a streamlined approach for both providers and customers.

Contract Rates on Infrequent Lanes Are 'Paper Rates'

Riley said the core problem in today's market is that contract awards on infrequent lanes have become effectively unenforceable. A rate locked in October on a lane that ships only once over six months carries almost no chance of being honored when a truck is actually needed.

"Spot was a slight premium. Now acceptance being lower, spot is 40%, 50%, 60%, sometimes 70% higher than what you thought your contract rate was going to be," Riley said. "But it's a paper rate that's never going to be honored."

He said the "tail" of small, infrequent shipments — lanes moving fewer than 5 to 20 times per year — has grown longer and is now the primary stress point in shipper networks. Over the past three years, carriers accepted most contract tenders at high rates and spot pricing carried only a slight premium. That dynamic has shifted significantly, with falling acceptance rates pushing shippers toward an increasingly expensive spot market.

Recommended Fix: Multiple Primary Awards Over Waterfall Guides

Riley's recommended fix is for shippers to move away from the traditional waterfall routing guide — a procurement structure in which a single primary carrier receives first refusal on a lane, followed by a cascading list of backup carriers at progressively higher rates — and instead restructure into multiple primary awards with adjusted percent allocations across carriers.

"I don't think that give me one high-volume primary lane and then a tail of just small lanes that I know it's going to be extremely challenging to serve," he said, noting that the customer's concern is the inability to predict how aggressive the spot market will run.

Riley also pointed to proactive rate increases as a tool some shippers are already deploying. He described customers who voluntarily offered contract increases to offset rising rejections and spot exposure, which enabled RXO to secure greater carrier commitment. However, he was direct about the trade-off: "Don't pay me 10% more and expect me to not —" deliver improved service in return. He noted that proactive increases also help shippers set budget anchors rather than facing unpredictable spot costs.

On backup matrix rates — contracted rates at a higher level than primary awards — Riley described the approach as "a gamble" in the current environment.

Technology and the Coyote Acquisition

On the technology side, Riley highlighted RXO's investment in automated spot processes, including indexed or cost-plus models. He described the practice of staging dedicated power-only equipment on customer yards exclusively for spot coverage, keeping it separate from contract lane operations.

"Being creative for how you're bringing a solution to a customer that's not just, 'I need more money,'" Riley said, summarizing the approach.

Riley also credited the 2023 Coyote acquisition — RXO's purchase of Coyote Logistics from UPS — with expanding RXO's carrier network into industries and markets where the two companies had limited prior overlap. The deal provided both consistent coverage and surge capacity, which Riley described as critical in the current market environment.

RXO Extra and the 'Win the Tiebreak' Philosophy

Riley described RXO's carrier retention strategy as centering on the RXO Extra program, which offers drivers fuel discounts, tire benefits, and maintenance support. He said these programs are especially impactful for smaller carriers facing soaring fuel costs.

"Win the tiebreak" is the internal framework Riley uses when coaching his team. The concept is straightforward: if price and service metrics are equal among a room of 60 to 70 providers, relationship and reliability determine who gets the load.

"If all things are equal, what's the differentiator? That's why you would choose one thing over another," Riley said. He emphasized that carriers need trust and communication from shippers in both good times and bad, and that customers should reward strong performers with a shared sense of ownership.

At the Univar Solutions event, Riley noted that not all providers return each year. "It's nice to see a lot of the same faces. And for those that aren't here anymore, you've outperformed them to have the opportunity to be in this room," he said.

Carriers as an Extension of the Brand

Riley stressed that RXO views carriers as a direct extension of its brand and business. During a presentation at the event, a Univar Solutions executive named Dorica reinforced the same message, Riley noted.

"Our carriers are an extension of our brand, of our business. You're not just signing up to perform a task or a contract award. You're really signing up to be and represent that customer and obviously your own reputation as well," Riley said.

He described the relationship among shippers, carriers, and providers as a "trilogy" in which no party should feel left out. Shippers bear responsibility as well, Riley said, by cultivating a "shipper of choice" environment that makes carriers want to serve their facilities.

"It should be a two-way street where it's not always the provider wanting to do business, want to do business, want to do business. You have to give me a good reason why I want to do business with you," he said. "All business is not good business."

Collaborative Culture and Shared Accountability

Riley credited RXO's leadership, including Drew and Chief Strategy Officer Jared Weisfeld, for fostering a culture where no individual claims sole ownership of an account. "I never say an account is my account. It's always our account," he said. He described shared responsibility across key account managers, operators, carrier procurement teams, branch operations, sales leaders, and executive leadership.

Riley cited an example of Weisfeld joining a meeting on 15 minutes' notice. "I called him, I was like, 'Bro, I need you.' He was like, 'I'm in.'"

Upcoming Events and Resources

Riley flagged an upcoming RXO quarterly state-of-industry webinar scheduled for August 25, to be led by Chief Strategy Officer Jared Weisfeld and Corey Klusia. The session will feature the Coyote Curve along with market forecasts and projections, incorporating FreightWaves SONAR data.

RXO's quarterly earnings announcement was described as imminent at the time of the interview, with Riley expressing enthusiasm about information to be shared.

Shippers with routing guide failures can access capacity resources at rxo.com/capacity.