Subscribe to our free, weekly email newsletter!


TransCore reports October 2011 spot market volumes are up 39 percent annually

By Jeff Berman, Group News Editor
November 16, 2011

October spot market volume saw a 39 percent gain, according to data released this week by TransCore.

Company officials said that this output marked the highest same-month volume since the aftermath of Hurricane Katrina in 2005 and was the highest same month volume since then. On a sequential basis, spot market volume fell 3.7 percent, which TransCore said is in line with typical seasonal patterns.

Truckload freight rates, excluding fuel surcharges, were mixed for all equipment types in October, with national average rates for dry vans up 6.3 percent annually compared to October 2010 and up 1.5 percent compared to September. Reefer rates were up 2.7 percent annually and 2.5 percent compared to September. Flatbed rates were up 12 percent annually and were flat compared to September.

Carriers told LM at this week’s TransComp exhibition in Atlanta that fairly tight capacity is a major factor in driving spot market volumes, although capacity is not as tight as it was as recently as a few months ago.

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 high, and gas prices are about a dollar higher than they were a year ago at this time.

Usually, the spot market rates are about 15 percent lower than contract rates. But this year, according to TransCore’s analysis, on a national average about 24 percent of lanes had spot market rates that were higher than contract rates during the second quarter.
While fairly tight capacity remains a driver for high spot market volumes, it stands to reason that will continue to be the case going forward.

“From an industry-wide perspective, there is a proliferation of freight brokers,” said Stifel Nicolaus analyst John Larkin in a recent interview. “We have not saturated the percentage of the market that can be brokered yet. In addition to CH Robinson being the 800-pond gorilla in this space, you also have all these other companies out there doing it, too. At the same time, most of the asset-based carriers are starting up brokerages. It is a rarity when you see a carrier that does not have a brokerage.”

As long as spot market prices run below contract market prices, Larkin said it will continue to be something shippers leverage.

About the Author

Jeff Berman headshot
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).


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!

Recent Entries

NRF's Jonathan Gold explains that the past year was replete with disruptions, slowdowns and partial shutdown, which can no longer be the norm, saying ports and dockworkers must adapt to ensure they provide shippers with the predictability and stability they need.

Last month, I gave a presentation to a group of senior transportation and supply chain executives. It was entitled “Predictable Surprises,” because it addressed how transportation and supply chain professionals can eliminate unpleasant surprises by looking at and evaluating issues in the transportation industry, and projecting how those issues will affect their companies.

The Port of Los Angeles (POLA) and the Port of Long Beach (POLB) said this week that they have formally established working groups, which they said will aim to seek new supply chain efficiencies, and focus on various aspects of port operations, including peak operations and terminal optimization in an effort to augment the San Pedro Bay port complex.

A month ago, the Shippers Conditions Index (SCI) from freight transportation consultancy FTR indicated that shippers might be traveling on a rocky road in the coming months. And one month later it appears those concerns appear to have been confirmed.

The American Association of Port Authorities (AAPA) had nothing but praise for the Senate passage over the past weekend of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA-2015).

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA