Subscribe to our free, weekly email newsletter!


Trucking news: Spot market rates continue their ascent

image
By Jeff Berman, Group News Editor
June 16, 2010

As truckload capacity continues to tighten, spot market rates continue to rise.

That appears to be the consensus based on research released by Avondale Partners and TransCore.

In a research note issued this week, Avondale analyst Donald Broughton wrote that since the Avondale Truckload Spot Market Index went positive year-over-year in November 2009 for the first time in more than a year, the index continues to rise at a very impressive—in fact, record setting—rate.

The Avondale report stated that its index continued to show steady improvement on a three-month average basis, coming in at a 253 percent increase in May, which was down slightly from April’s 260 percent gain. Despite the significant increases, Broughton noted that the year-over-year strength is somewhat exaggerated by the severe weakness in last year’s index.

“On a nominal basis the index reported a stronger reading than all historical levels reached for the month of May, as it did in April,” wrote Broughton.

“The result suggests that in the spot market, the ratio of the number of loads available versus the number of trucks available has improved so dramatically that contract market pricing has to move up materially.”

TransCore reported that its North American Freight Index saw a 3.2 percent decline in May from April, following 25 and 44 percent month-to-month gains in April and March, according to published reports. Even thought May was down sequentially, TransCore said load volume in May reached its highest level for the month in ten years.

“Spot prices have moved up dramatically, and I expect that by the end of the third quarter if will show up in data from publicly traded carriers,” said FTR Associates Partner Noel Perry. “And it takes time for price changes to mature [which impacts pricing]. If you sign a contract in December, prices won’t change until the next December.”

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

Earlier today, the United States Senate signed off on a six-year surface transportation authorization, according to various media reports. The bill, entitled the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act, passed by a 65-34 margin and comes at a time, when the most recent extension for surface transportation funding expires tomorrow, July 31.

Demand for the $500 million in available funding for the United States Department of Transportation’s TIGER (Transportation Investment Generating Economic Recovery) competitive grant program was easily trumped, with applications for the seventh round of TIGER grants coming in at $9.8 billion, or nearly twenty times the available amount, DOT said this week.

Global logistics managers will be tracking the progress of the controversial Trans-Pacific Partnership (TPP) talks in Maui, Hawaii this week, as negotiating parties hope to finalize the agreement.

As has been noted in recent coverage on this site in regards to Peak Season, one underlying theme has been, and remains, how Peak Season is not what it used to be. That is not to say there will not be any Peak Season-related activity. Make no mistake, there will be and things driving it from the seasonal nature of business activity and cargo flows to higher demand and increased e-commerce activity, among others.

UPS Access Point locations serve as a replacement delivery address when consumers are not at home to receive a package or when consumers want a delivery to go somewhere other than their residence.

Article Topics

News · All topics

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