TransCore reports mixed sequential and annual spot market data for March 2012
TransCore’s DAT North American Freight Index, which reflects spot market freight availability on its network of load boards in the United States and Canada, posted a 40 percent gain in March over February and was down 6.1 percent annually compared to March 2011.
in the NewsQ4 2017 Rail/Intermodal Roundtable: Improvements apparent; work remains The State of the DC Voice Market Tax reform agreement paves way for new infrastructure spending Transportation equipment financing to remain an attractive option for truckers Finding Answers to: No Time, No Tools, No Talent More News
Spot market conditions for the trucking sector were mixed in March, according to data released by TransCore this week.
TransCore’s DAT North American Freight Index, which reflects spot market freight availability on its network of load boards in the United States and Canada, posted a 40 percent gain in March over February and was down 6.1 percent annually compared to March 2011, which TransCore said was a record month in which the spot market saw record volumes.
March truckload freight rates saw gains for all spot market categories compared to February, according to TransCore. Dry van, flatbed, and reefer rates increased 3.2 percent, 1.2 percent, and 0.7 percent, respectively. And on an annual basis spot market dry van rates dipped 1.5 percent compared to March 2011, with flat bed and reefer rates flat.
The sequential increases in TransCore’s spot market data match up well with recent data from the Cass Freight Index, which found that freight expenditures were up 1.0 percent compared to February and 4.3 percent annually.
The Cass report noted that “[r]ates on the spot market rose throughout most of March in response to increasing demand and tightening capacity,” which appears to be a common theme in the trucking sector since carriers have regained pricing power since the end of the Great Recession.
And as LM has reported, shippers and carriers alike have said that the spot market is still demanding top dollar rates, as carriers are reluctant to add capacity at a time when the economic recovery appears tenuous, retail sales are flat, unemployment is still high, and gas prices remain higher than they were a year ago at this time, although the gap has been closing in recent weeks.
Robert W. Baird & Co. analyst Benjamin Hartford noted in a research note that spot market trends tend to moderate on a seasonal basis, adding that supply and demand dynamics remain relatively balanced into early 2012.
“We expect supply/demand dynamics to remain tight consistent with current expectations for slow demand growth and limited incremental capacity deployment,” wrote Hartford.
Lana Batts, a partner at Transport Capital Partners, recently told LM that when the recession was still intact the freight brokerages operating on the spot market suffered because there was far less available freight and carriers were going wherever they could to get freight. But when the recession was over in February 2011, she said carriers felt they had all the freight and customers they needed and felt they did not need to go back to brokerages.
“Now, they are going back to brokerages because there is a shortage of equipment and they are getting better spot market rates than they are getting out of their contract rates,” she said. “Brokerages tend to do well when there is an imbalance. That imbalance is related to there not being enough freight or not enough trucks.”
The 2009 imbalance was brought on by a lack of freight, due to the recession, whereas the issue less than three years later—through February 2012—has to do with a lack of trucks.
About the AuthorJeff 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. Contact Jeff Berman
Subscribe to Logistics Management Magazine!Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!
34th Annual Quest for Quality Awards: 2017 Awards Dinner Trucking Regulations: Washington U-Turns; States put hammer down View More From this Issue