DC Velocity - February 2016

The U.S. truckload spot market has found itself so far this year in the same doldrums where it spent most of 2015, a trend that, unless reversed, will put shippers in the familiar position of calling the pricing shots and motor carriers in the familiar position of taking them.

The spot, or non-contractual, market was weak during virtually all of last year, spiking upward meaningfully on a month-over-month basis only in December. Some chalked up the weakness to the markets reverting to the mean following an extraordinary 2014, when bad winter weather in that year’s first quarter shut down capacity, sent spot rates soaring to record highs, and kept rates elevated for quarters to follow.

But as the calendar has turned, the comparisons with 2014 have become stale. After rising at the immediate turn of 2016, spot market load-to-truck ratios—the ratio of the number of loads per available truck—and spot rates slid across the board in the week ending Jan. 16, DAT Solutions, a consultancy that operates one of the nation’s largest load board networks, said in a Jan. 20 report. In the dry-van segment, load posts fell 21 percent from the week ending Jan. 9, while the number of available trucks rose 29 percent, according to DAT. This caused load-to-truck ratios to drop by 38 percent, DAT said.

The national average van rate fell 5 cents from the prior week to $1.68 per mile, which included a 1-cent decline in the average fuel surcharge, triggered by declining oil and fuel prices, DAT said. Spot rates are quoted to shippers on an “all-in” basis, which combines the base rate and prevailing fuel surcharge.

The refrigerated and flatbed spot markets didn’t fare much better. “Reefer” load posts dropped 26 percent from the prior week, while truck posts jumped

22 percent, resulting in a 39-percent fall
in the load-to-truck ratio. The national © 2015 Apex Industrial Technologies LLC. All rights reserved. Apex Supply Chain Technologies
and its mark are registered trademarks of Apex Industrial Technologies LLC.
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average reefer rate dropped 6 cents, to $1.90 per mile, which included a 1-cent drop in the fuel surcharge. Flatbed loads held steady, but available capacity increased 27 percent, resulting in a 21-percent decline in the load-to-truck ratio, DAT said. Average flatbed rates edged down 2 cents, to

$1.90 per mile.

In mid-January, investment
firm Avondale Partners and
audit and payment concern Cass
Information Systems said their
index of truckload line-haul rates,
which excludes fuel surcharges and
accessorial fees, rose less than 2
percent in each of the last three
months of 2015 over 2014 results.
What’s more, spot rates decreased
in December to levels not seen
since 2009, a bothersome sign for
carriers negotiating contract rates
because spot market prices gener-
ally lead contract pricing, which
accounts for as much as three-quar-
ters of the enormous U.S. truckload
market.

go figure …

28%

Percentage of 267 survey respondents (shippers, carriers, intermediaries, and suppliers) who predicted self-driving trucks would have a medium or high impact over the coming eight years.