Subscribe to our free, weekly email newsletter!


TransCore data shows strong spot market growth continuing

image

TransCore’s North American Freight Index for June 2010 showed a whopping112 percent increase in spot market freight availability compared to the same time period last year.

By Jeff Berman, Group News Editor
July 21, 2010

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.

While the spot market annual comparisons are high, they are being compared to a difficult 2009. And as truckload capacity continues to tighten, spot market rates are continue to go north.

“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.

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

The PMI, the ISM’s index to measure growth, increased 1.8 percent to 57.1 in July. This is 1.8 percent higher than the 12-month average of 55.3. The PMI has grown in 18 of the last 20 months, with economic activity in the manufacturing sector expanding for the last 14 months as the overall economy was up for the 62nd consecutive month.

YRC Worldwide, whose regional and long-haul units provide the second-largest LTL capacity in the trucking industry, narrowed its second-quarter loss to $4.9 million on $1.32 billion revenue, compared with $15.1 million loss on $1.24 billion revenue in the year-ago quarter.

With NFL training camps in full swing, it stands to reason that Congress must be replete with football fans, given how it basically has elected to punt on federal transportation funding yet again, with the Senate yesterday signing off on a ten-month bill to keep federal surface transportation funding intact through May 2015 through a nearly $11 billion stopgap measure.

Carload volumes were up 4.3 percent at 306,988, and intermodal volume for the week ending July 26 was up 3.3 percent at 264,809

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA