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