Fleet Management

Spot Market Truckload Rates Continue to Fall

February 17, 2016

By Evan Lockridge

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Spot-market load availability moved a little higher last week, but it was not enough to outweigh a gain in truck capacity with rates continuing to fall.

According to a report from DAT Solutions, based on its network of load boards, an 0.8% increase in freight for the week ending Feb. 13 came as truck capacity grew by 1.2%.

With the national average diesel price falling below $2 per gallon, truckload rates on the spot market continued their downward trend. Freight brokers usually quote a one-time price that includes both a line-haul portion and the fuel surcharge, so declining fuel prices influence spot market rates significantly, according to DAT.

The number of van load posts dropped by 6% last week, while truck posts were 1% higher than the previous week. The van load-to-truck ratio fell 6%, resulting in 1.3 van loads for every truck posted on the DAT network. The national average van rate dropped 4 cents last week to $1.58 per mile. All rates include fuel surcharges.

Reefer load volume fell 7% and truck posts rose 3% last week. As a result, the reefer load-to-truck ratio fell 9% to 3.1 loads per truck. The national average reefer rate held steady at $1.85 per mile.

Flatbed load volume was up 10% while capacity increased less than 1%. Despite a 10% increase in the flatbed load-to-truck ratio to 9.6 loads per truck, the national average flatbed rate fell 2 cents last week to $1.83 per mile.

Weaker Rates Begin The Year

Meantime, new figures out for January indicate last week's performance is part of a trend, with spot market freight volume declining 9.1% for the month, while truckload line haul rates edged down compared to December.

The month-over-month decline was typical of seasonal norms, according to the DAT North American Freight Index. January freight availability increased in only three of the past 20 years – 2010, 2013 and 2014.

By equipment type, van freight availability fell 15% and refrigerated volume dropped by 8.9%, but flatbed trailer availability gained 6.1%, compared to December. Spot market rates dropped 1.3% for vans, 1.1% for reefers, and 0.6% for flatbeds, month-over-month, not including fuel surcharges.

Compared to January 2015, overall spot market freight availability fell 35%. This continues a 13-month trend of year-over-year declines, due to a combination of tepid freight growth and abundant capacity, according to DAT.

Van demand was down 32%, reefer volume fell 37% and flatbed freight availability lost 42%, year-over-year. Line haul rates dropped 7.4% for vans, 7.9% for reefers and 8.1% for flatbeds, year-over-year.

Total rates paid to the carrier fell by 14% compared to January 2015, due to a 49% decline in the fuel surcharge, which comprises a portion of the rate.

The Journal of Commerce reports that lower spot market rates are prompting some shippers to press for lower contract rates. "According to BB&T Capital Markets, some shippers are pulling down rates in contract talks by turning to third-party logistics providers, while rethinking how they ship lane by lane," JOC notes, as "declining sales and 'zero-budgeting' mandates put more pressure on logistics managers to lower or contain rates."

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