TransCore data shows strong spot market growth continuing

Even though various freight- and economic-related indices have lost steam in recent weeks, one which continues to chug along is the TransCore North American Freight Index.

TransCore reported in its index this week that spot market freight availability in June was up 112 percent year-over-year. And in the second quarter it was up 60 percent compared to the first quarter and up 331 percent compared to the second quarter in 2009. 

And overall load volume from May to June fell 11 percent, with flatbeds taking a dip after five consecutive months of strong volume growth, according to TransCore. The company added that dry and refrigerated van loads were up 2 percent from May to June. What’s more, TransCore reported that North America-based 3PLs, carriers, and owner-operators are on pace to list more than 60 million loads this year.

“Basically, the scenario people are looking at right now is that we are seeing some unprecedented variation in the marketplace,” said Mike Regan, president and chairman of the board at TranzAct Technologies. “But from the last week of June through the first two weeks in July, truckload market activity was down significantly.”

In terms of how much it fell, Regan cited an example of a story told to him at a recent industry conference in which he learned a flatbed carrier had 7 loads for every available piece of flatbed equipment. But a few weeks later that ratio had shrank to 2.5-to-3 loads for every available piece of equipment.

This sequence, explained Regan, indicates that carriers have continued to reduce capacity, which is helping to drive large year-over-year spot market availability and rates, coupled with a trying 2009 in which volumes and rates plummeted. And while other trucking indices like the American Trucking Association’s monthly tonnage index and the Cass Index provide detail on what overall demand looks like, the gains in tonnage and demand they show are not up nearly as much as the TransCore index.

The most recent TransCore data matches up well with the Truckload Spot Market Index from Avondale Partners, which was most recently updated in early June.

Avondale analyst Donald Broughton wrote in June 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.

“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,” wrote Broughton.