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Will an unexpected surge in demand for non-contract, or
“spot” market, truckload capacity influence the outlook for
contract rates as the industry heads into the traditionally
strong spring shipping cycle?
Spot traffic was anything but punk in February, which is
normally a slow month. DAT Solutions LLC, a consultancy
that provides loadboard services to the spot market, said
total volumes rose 48 percent from the same period in 2016.
This led an unusual number of contract carriers to shift
capacity into the spot market, a common tactic when spot
demand spikes.
The influx of supply drove down spot rates for dry van
services—the most common form of truck transport—by 5
cents per mile over January levels, including fuel surcharges,
according to DAT. Spot rates for refrigerated traffic fell 9
cents per mile on a sequential basis. Flatbed rates bucked the
trend, up 4 cents per mile, due to strength in demand for
building materials and heavy machinery used by companies
in the construction and energy sectors.
By the last week of February, however, spot rates had
increased week over week, and DAT’s load-to-truck ratio,
In response, carriers are freezing their existing fleet sizes
probably through the rest of the year, according to Larkin.
This after many of them downsized their fleets by 2 to 5 percent during a difficult 2016.
Surge in spot market traffic
drives down truck rates; will
contract bids follow suit?