Are Routing Guide Failures Driving Up Your Costs? Plan for a More Predictable 2027

Has there ever been a more expensive time to ship products?

A recent Redwood blog post focused on record-high diesel prices and the resulting fuel surcharges that are inflating shippers’ costs. But the problem is bigger than that. Driver shortages, tariffs, rising insurance rates, shipping lane disruptions, and other factors have also helped raise the average freight contract rate to $3.11 per mile — up 29% from a year ago. Contract rates are at their highest since August 2022.

And capacity continues to shrink, exacerbating the situation. Data from the Federal Motor Carrier Safety Administration reveals that nearly 64,800 motor carriers — or about 23% of all carriers — exited the market in 2025. With average operating margins in the truckload and refrigerated sectors below 1% last year, it became impossible for many carriers to stay in business.

The remaining carriers are losing drivers, tightening capacity even more. Since June 2025, the U.S. Department of Transportation has revoked over 28,000 commercial trucking driver licenses. Another 20,000 drivers were taken off the road for failing to meet English language proficiency requirements.

Rising costs, shrinking capacity: It's not surprising we’re seeing more tender rejections and routing guide failures under these conditions.

Achieving Routing Guide Certainty, Even in Uncertain Times

Shippers create routing guides with a simple goal: Increasing predictability and cost control. They line up carriers with a reasonable expectation that they’ll accept a load at a specific cost. If the primary carrier rejects the load, there’s always option 2 or 3.

As a shipper goes down the carrier list, risks and costs increase. Lead times grow. Expediting may become a necessity. At some point, the load might hit the spot market, where the shipper loses even more control.

In predictable times, routing guides should hold up reasonably well, with the load awarded to a first- or second-choice carrier. But in today’s high-cost, low-capacity market, routing guides are failing more often. Carriers are gaining control. But can we really blame them for rejecting a rate that made financial sense months ago — but no longer does?

Shippers need to regain control by defining and implementing smarter, more successful routing guides. Even amid uncertainty, they can operate with greater certainty. But it takes upfront analysis, careful planning, and strategic carrier partnerships. As a modern 4PL, Redwood can help.

Maximizing Your Margins Amid Record Cost Increases

Based on your own data and applied analytics, the Redwood Advisory team can identify exactly where your routing guides are failing, by lane and carrier. They can find the root cause of every rejection — whether it’s pricing, capacity, or lead time — and help create new routing guides that address those issues, increasing your chances for success.

Our experts can help negotiate carrier contracts that hold up, by forecasting both your loads and future market conditions more accurately. We also help you leverage your volume buying power and recurring loads to win more favorable contracted rates from preferred carriers. Redwood can suggest mode shifts, a new carrier mix, and other actions your internal team may not have considered.

Redwood also helps your team create contingency plans before a load is rejected, so you can pivot immediately and automatically. Contingency planning minimizes cost, risk, and dwell times, while maximizing margins and service.

Your organization can also achieve more predictable and profitable financial results by capitalizing on Redwood’s Freight Capacity solutions. Redwood is a Top 15 North American freight broker with the strong carrier relationships, pricing intelligence, and advanced technology you need to balance high service with cost control.

You can also connect your TMS directly to Redwood’s API Rating Tool. When a routing guide fails, this solution automates the handoff between your chosen carrier and the spot freight market. Redwood’s vetted carrier network includes over 26,000 providers across truckload, less-than-truckload, temperature control, and flatbed. Within seconds, multiple bids are available, guaranteeing tender acceptance.

Costs Will Rise Again in 2027. Prepare Now.

With no end in sight for inflation, carrier exits, driver shortages, and other trends, the U.S. freight market is unlikely to stabilize soon. Instead, analysts expect average rates to climb by another 10-12% in 2027.

While you have little control over economic and political events, you do have control over your response to changing market conditions. By partnering with the experts at Redwood, you can create more informed, more profitable routing guides — and pivot faster and more profitably when needed. Reach out to Redwood to start planning a more predictable 2027 now.