This Freight Market Update for December 21 provides a detailed analysis of recent developments in the freight market and trucking industry, drawing insights from the valuable information shared by Trucking Made Successful on YouTube.
Net Change in Authorities
As of the preceding Friday, December 15th, a significant decrease of 284 carriers week over week has been noted. Throughout 2023, a consistent decline in carriers has persisted, with no month experiencing a surge in carriers. The gradual exit of capacity is evident, paralleled by a chart illustrating a substantial drop in transportation revenues since 2022.
Spot Vs. Contract Rates
Analyzing the difference between spot and contract rates for 2022 (green) and 2023 (blue), a two-week lag in the presented numbers is observed. Despite this lag, the data indicates that contract rates in 2023 are lower than those in the corresponding period of 2022. Two weeks ago, contract carriers received $0.62 per mile more than spot carriers, with this gap progressively narrowing. Anticipated downsizing and shutdowns among contract carriers may lead to an increase in tender rejections.
Volumes and Rejections
Freight volumes continue to adhere to the annual cycle, remaining above the levels seen in 2019, 2020, and 2022. While volumes are currently on a downward trend, in line with the year-end pattern, rejections have exceeded 2022 levels, reaching 4.85%. This suggests that approximately 4.85% of total freight is flowing into the spot market. Despite the seasonal decrease in volumes, a substantial surge in spot market volumes is not anticipated at present.
Diesel prices show a downward trend, but a recent slight uptick raises concerns about the future. Comprehensive market recovery assessment requires attention to the expense side of trucking, with the national average currently standing at $4.06 per gallon.
Spot Market Conditions
Turbulence is observed across all equipment types in the spot market. Contrary to the typical year-end pattern, dry van spot volumes have significantly decreased over the past two weeks. Reefers also experienced volume decreases, deviating from historical expectations. Flatbeds, however, showed no change in volumes, departing from historical patterns that usually indicate an increase.
Spot market rates continue to disappoint, with dry vans experiencing a further decrease to around $1.95 per mile on average. Reefers are also down to around $2.20 per mile on average, while flatbeds remain stable, though at a low average of around $2.30 per mile.
The headhaul index identifies areas where carriers have negotiating power. For flatbeds, the Pacific Northwest is cooling down, while the South and Southeast present a lack of capacity compared to available freight.
The reefer headhaul map indicates that Central CA and Idaho are better areas, while the Midwest is hit and miss, and the Northeast and Southeast are saturated with reefers.
Dry vans suggest a need for trucks in the Southeast and parts of the Midwest, with an oversupply of trucks in other regions.
Where to Go Next Week
For reefers, markets with elevated volumes and rejections include Twin Falls ID (23.64% rejection, volume index of 34) and Ontario CA (10.21% rejection, volume index of 56).
Dry vans may find relatively better conditions in Green Bay WI (15.33% rejection, volume index of 64), Rock Island IL (12.15% rejection, volume index of 62), and Columbus OH (7.33% rejection, volume index of 171). Overall, adhering to the Midwest appears to be a relatively safer strategy based on the current market dynamics.
This insightful update is made possible by the expertise and content shared by Trucking Made Successful on YouTube.
A: 1500 Benson Road South, Suite 201 Renton, WA 98055
Dominik was a German exchange student in high school before graduating from the University of Washington in Business Administration – Information Systems and Retail Management. His insurance career started in 2008 when he decided leave his retail management career behind to start his own business. His American Family Insurance agency quickly grew to service 700 clients and families. While the idea of becoming an independent broker started in 2010, a horrific car accident put that plan on hold. In 2014, Dominik and his wife Michele changed from a captive agency to become the independent agency that you see today.
Our Insurance Partners
The great thing about an independent insurance brokerage like the DOK Insurance Agency is that we can offer insurance policies from literally hundreds of insurance companies and still be your advocate to each one of them.
Get a free insurance quote today
We are an independent insurance brokerage that offers a wide variety of services.
We have seen and gone through a lot of changes since we opened our doors in 2008, but one thing hasn’t changed: We are a family owned business that not only care about our clients but also about the communities that we live in.