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

While core metrics were down from a very impressive July, the August edition of the Non-Manufacturing Report on Business from the Institute of Supply Management (ISM) was still very strong.

The Clean Cargo Working Group (CCWG) has released a report indicating that in 2014 average CO2 emissions in the global container shipping trades declined 8.4 percent from the year before.

UPS Freight, the less-than-truckload (LTL) subsidiary of UPS, recently announced it has rolled out a new service center facility in Franklin Park, Illinois. This is the company’s fifth Chicago-area service center along with other ones in Aurora, Chicago, Palantine, and South Holland.

Putting the renewed strength in the truckload market into a very positive perspective is a report issued by Avondale Partners analyst Donald Broughton, which was released yesterday. Entitled, “Q2’15 Trucking Capacity; Goldilocks Era Continues,” Broughton explained that in the second quarter only 70 truckload fleets failed, or exited the business. That number may seem high to some, but it is not, especially when you consider that the second quarter of 2014 saw more than five times as many truckload carriers, 375 to be exact, exit the business.

Global demand remains stable as packaging equipment providers of all sizes shift focus

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