March truckload spot market sets another record month, according to TransCore

As trucking capacity remains tight, one of the biggest beneficiaries of that is the spot market.

That was made clear in data released this week by TransCore, which indicated that spot market truckload freight volume in March hit its highest level in March since the firm’s North American Freight Index was rolled out in 1996.

TransCore officials said that truckload spot market freight availability in March hit its highest level for any month since October 2005, due to “pent-up freight demand following Hurricane Katrina.”

According to TransCore, March load volume was up 23 percent from February and 40 percent annually, with freight volumes paced by a 57 percent gain in flatbed freight and dry van freight availability up 32 percent and reefer loads up 26 percent from February.

Tightening capacity has been a steady theme of late in trucking circles and many industry experts do not expect that to change anytime soon in the near future, with carriers keeping assets in check with demand levels and fuel prices continuing to rise on a weekly and daily basis.

A report by Robert W. Baird & Co. analyst Jon Langenfeld noted how the improving demand environment is consistent with expectations for further economic growth.

“Continued spot market demand strength in March is a positive indicator for
broader domestic demand, as constrained truckload capacity benefits pricing growth
broadly across domestic transportation modes,” according to Langenfeld. “Weather-related expenses and rising fuel costs represent headwinds to 1Q results among many transports, though potential for improved sentiment with solid demand and pricing commentary from public carriers.”

And the overall economy now compared to a year ago, when a significant inventory re-build was occurring, also is factoring into trucking market conditions, according to Doug Waggoner, CEO of Echo Global Logistics, a non-asset based freight brokerage company and a provider of technology-enabled transportation and supply chain management services.

“In the first half of 2010, we saw capacity get real tight as there was a general inventory re-stocking take place, and in the second half of the year that restocking subsided and we settled in on a general economic rate, which is where we are now,” said Waggoner in an interview earlier this year.

This growth rate, said Waggoner, is modest and not taxing transportation capacity. And at the same time, he pointed out it is making all the asset-based transportation carriers more healthy again through things like modest rate hikes in the less-than-truckload (LTL) sector. While on the truckload side, he noted there appears to be modest excess capacity, with carriers practicing discipline by not adding capacity to fleets, as well as underlying themes like overall economic uncertainty, increases in fuel prices, and the outcome of various government regulations like CSA 2010.