RXO Inc., a major U.S.-based freight brokerage and 3PL provider, is feeling the pressure as previously locked-in contract rates have become misaligned with today’s higher freight costs.

During its latest earnings call, RXO’s management repeatedly referred to a “rate squeeze,” describing how the company’s contracted commitments to shippers are now out of sync with what carriers demand in the current market.

This growing imbalance underscores the volatility of freight economics and serves as a warning sign for the broader 3PL industry.

📌 Key Takeaways for Logistics and 3PL Leaders

• Contract-rate lag: RXO’s pre-set agreements prevent quick adjustments, even as spot and short-term rates rise across the market.
• Margin risk: The company could face tighter profit margins if it must pay more to carriers while earning less from locked-in shipper contracts.
• Industry ripple: Other 3PLs with long-term commitments may face similar financial pressure as capacity tightens and operational costs climb.
• Strategic response: To navigate the squeeze, RXO and its peers may need to renegotiate rates, lean more on the spot market, or adapt service models to match shifting conditions.

For logistics planners, shippers, and carriers, RXO’s situation is a clear reminder: in today’s fast-moving freight landscape, timing and flexibility in rate strategy can define success or risk significant loss.