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TransCore reports a near 40 percent gain in spot market van rates

By Jeff Berman, Group News Editor
March 31, 2011

The trucking spot market saw modest gains for the week ending March 24, according to data released by TransCore.

TransCore reported that linehaul rates for vans on the spot market were up 38 percent in the 64 national lanes it tracks. But it also pointed out that rate declines in the remaining lanes left the national average up 0.8 percent.

Looking at lanes with the most significant weekly gains, TransCore said that outbound rates from Atlanta were up 5.9 percent, with Atlanta and Orlando van rates each up $0.19 per mile for a 9.5 percent gain.

On the other end, TransCore said that van rates from Dallas dipped by an average of 1.7 percent, with a decline of $0.22 per mile, and a $0.21 decline from Dallas to Laredo.

“The spot market is the segment of the market that is under the most stress,” said Noel Perry, FTR Associates Managing Director and Senior Consultant, in a recent interview. “And March is the beginning of the seasonal spike in volumes, so I would expect to see what we are seeing now in the spot market.”

Perry added that at the moment on the supply side there is a belief that smaller fleets that made up a high portion of spot market capacity are the ones that are most targeted during the downturn, which, in turn, leads to restricted supply. What is happening with the spot market now, he noted, is a reflection of the upturn in the economy coupled with capacity tightening.

A recent report from Donald Broughton, an analyst at Avondale Partners, stated that the Avondale Truckload Spot Market Index is also showing that capacity is relatively tight, although it has leveled off in recent months.

“While it remains at nominally high levels and is showing ~60% YoY growth, the current directional trend suggests contract rate increases in the mid to low single digits, rather than the high single digit increases expected by some,” wrote Broughton. “Rate increases in low to mid single digits are certainly a positive for the TL carriers, however me remain cautious given that cost headwinds (i.e. driver pay, fuel, equipment) may offset much of the gains seen from pricing.”

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About the Author

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Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

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