TransCore data points to 122 percent annual gain in July spot market freight availability

While over-the-road transportation capacity remains tight, spot market freight availability continues its upward trend, according to the TransCore North American Freight Index.

TransCore reported in its index that spot market freight availability in July was up 122 percent year-over-year, but its load volume was 14 percent below June. Spot market freight availability in June was up 112 percent.  And in the second quarter it was up 60 percent compared to the first quarter and up 331 percent compared to the second quarter in 2009. 

TransCore also reported that spot freight loads for dry vans and reefer vans were each down 8 percent in July compared to June, with flatbed availability down 17 percent.

While some of the sequential declines are seasonal, other indices, such as the American Trucking Associations Tonnage Index and the Cass Freight Index, are also showing sequential declines especially when compared to a strong first half of the year.

“Due to a tough 2009, all these year-over-year numbers look great,” said Lana Batts, a partner at Transport Capital Partners. “One would expect that on an annual basis, even though some numbers are trending down month-over-month. Based on numbers from different indices, the peak for tonnage and spot market freight seems to be May.”

Batts said that many carriers are not at optimistic as they once were about volumes but they are still optimistic, even though they are not likely to rise at the levels they did earlier in the year. She added that most carriers are not seeing volumes decline, instead, they appear to be settling in.

What’s more, she noted that none of these metrics portend a potential double-dip recession, even though the tonnage growth increases from earlier in the year were not likely sustainable.

And with tonnage settling in at current levels, coupled with the amount of capacity that left the industry due to bankruptcies and a low level of truck manufacturing over the last three years, Batts explained that it does not take much of a bump in tonnage to run out of capacity.

“Tonnage is up year-over-year, which is great, and capacity is tight, which means rates are going to go up,” said Batts. “It is because of a slight bump in tonnage and huge exit in capacity.”
A trucking executive told LM that each month for the first half of the year was showing greater activity over the prior month.  The first month of the second quarter, while an improvement over the last month of the first quarter, lacked the rate of month-over-month increase for the months of the first quarter, and the three months of the second quarter showed meaningful increase on a consecutive month-by-month basis. 

“I attribute this to the replenishment of inventory levels that had hit “rock bottom” and somewhat of a case of increased optimism and spending on the part of the consumer,” said the executive. “Once inventory levels reached more manageable levels by the end of the second quarter, the rate of replenishment slowed down in July.  I anticipate another cyclical quarterly increase with another peak at the end of the 3rd quarter in September.”