Welcome back, readers! As we wrap up another month, it’s time to delve into the world of trucking. The weeks seem to be flying by, but our focus remains steadfast on providing insights into the trucking industry, with a special emphasis on the spot and freight market analysis. If you are passionate about understanding the intricacies of the trucking industry, you are in the right place! So, let’s dive into the data and explore the ongoing trends, market conditions, and future projections in the freight market.
Market Overview:
The freight market is experiencing significant fluctuations, with carrier authorities witnessing a net loss of 343 carriers as of September 22nd. This decline is attributed to the challenging market conditions, leading to a gradual exit of carriers from the market. The rate at which carriers are exiting is noteworthy, considering the current tumultuous state of the freight market.
Diesel Prices:
On a brighter note, diesel prices have shown a slight decrease for the first time since July, with the national level now at $4.59 per gallon. However, the East and West Coasts continue to experience either stable or increased prices.
Segment Analysis:
Flatbeds:
The flatbed segment has seen a decrease in volumes on the spot market, deviating from the typical five-year pattern. However, spot rates have experienced a minor increase, currently averaging at $2.35. The load to truck ratio for flatbeds is at its lowest since 2017, indicating heightened competition and potentially lower rates.
Reefers:
The reefer segment is experiencing a similar trend, with load volumes witnessing a decline. Spot rates for reefers have deteriorated by about five cents per mile, currently hovering around the $2.35 per mile mark. The Midwest and the Pacific Northwest continue to offer relatively better opportunities for reefers, despite a decrease in rejection rates.
Dry Vans:
Dry vans have also seen a decrease in spot market volumes, breaking the five-year pattern. Spot rates for dry vans have decreased by around 2 cents to $1.93 per mile. The Midwest region remains a preferable market area for dry vans, with higher rejection rates and proximity to other markets.
The current market scenario is a mix of stability and gradual deterioration, requiring extensive effort to find workable loads that cover costs and offer some profit. The ongoing challenges in the freight market are fostering learning and skill development, preparing us for future market upturns. It’s crucial to find positivity in adversity, learn from the experiences, and manage the prevailing situations effectively.
Port of Houston Sees Volume Drop
Port Houston experienced a decline in container traffic in August, managing 307,624 twenty-foot equivalent units (TEUs), a 3% decrease compared to July. This drop is attributed to a 9% reduction in loaded imports, which totaled 156,507 TEUs, and a 5% decrease in loaded exports, amounting to 110,719 TEUs. However, empty container volumes saw a significant rise of 29%, reaching 40,398 TEUs. The port’s executive director, Roger Guenther, remains optimistic, attributing the fluctuations to typical industry variances and expressing confidence in the port’s resilience and adaptability.
Trailer Orders Down 35% Year over Year
In August, the trailer industry saw a significant drop in orders, diverging from the strong demand observed in previous months, attributed to both seasonal changes and ongoing supply chain disruptions. This decline has raised concerns among industry experts about the sustainability of demand amidst prevalent market conditions, impacting production schedules and creating uncertainties in order fulfillment.
[September U.S. Trailer Preliminary Update] – Preliminary net trailer orders remain seasonally soft.
Get the update – https://t.co/Hh7ZZ4ioe6#Trailers, #Transportation, #truck, #trucking, #ACT, #ACTResearch pic.twitter.com/32sKi0PfwV
— ACT Research (@actresearch) September 19, 2023
The freight market is undergoing substantial changes, with carriers facing the brunt of the challenging conditions. Each segment, be it flatbeds, reefers, or dry vans, is navigating through decreases in volumes and rates. Despite the hardships, the learning curve is steep, and the experiences gained during these times are invaluable. It’s essential to remain resilient, manage operations meticulously, and stay informed about market trends. Here’s to hoping for a more favorable freight market in the future!
Sources: AAA, FreightWaves, Transport Topics
