It’s been tough times in the US freight sector for nearly two years, and the news isn’t getting any better for carriers, even as shippers benefit from the continued fall in rates.
Supply Chain Digest Says...
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DAT doesn’t see things turning around for carriers any time soon. It forecasts truckload rates will remain “stuck to the bottom” in a market defined by low demand and excess capacity."
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Take the monthly freight data last week for September from Cass Information Systems, based on the large amount of freight bills Cass pays for its clients each month.
The September decline in freight shipment volumes was 5.2% versus the same month in 2023, as the freight recession continues on. The index also fell 1.7% versus August.
After coming basically flat in for all of 2022, overall shipment levels fell 5.5% in 2023. In this latest monthly report, Cass forecasts another decline in shipments of 4-5% for 2024. Truckload rates, before fuel surcharge and other accessorial costs, were down 3.5% year-over-year, Cass also found.
The September numbers were a little more mixed for load board operator DAT. The DAT Index, a monthly market snapshot based on the number of loads picked up, showed month-on-month decline across the truckload sector for September, from -2% in the flatbed segment to -7% in the van and refrigerated van categories.
Year on year, however, DAT’s numbers were up 2% for flatbed, 6% for van, and 2% for reefer van.
DAT’s data also showed average linehaul rates have lately been flat, while contract rates still show sequential decline from the previous month.
So take your pick of data source from the two.
“September showed we’re firmly into a new freight cycle after nearly 22 months of rather extreme expansion and 27 months of contraction,” Ken Adamo, DAT chief of analytics, in a statement, adding that modest “improvements in rates, coupled with retail freight volumes and stable fuel prices, can get the motor carrier base on more solid footing.”
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 As he has referenced in the American Trucking Associations’ own freight tonnage index report, ATA chief economist Bob Costello commented on the weakness that “One of the reasons freight hasn’t recovered as much is because private fleets have taken some of the share,” adding that “Increasingly Amazon, Walmart and other large retailers have been offering their networks to third-party sellers to boost utilization rates and offset costs.”
DAT doesn’t see things turning around for carriers any time soon. It forecasts truckload rates will remain “stuck to the bottom” in a market defined by low demand and excess capacity.
“Looking ahead to Q4, the truckload rate per mile index is expected to stay near the floor established six quarters ago,” DAT noted.
These tough times for carriers will start to take its toll, Costello notes.
“I think supply [truckers] is coming out, but there’s got to be more and I think more will be coming, even if freight picks up a little bit,” he said.
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