August spot market freight volumes see gains, says TransCore

By Jeff Berman, Group News Editor
September 13, 2012 - LM Editorial

Spot market freight volumes in August saw an 8.4 percent annual gain, according to data released by TransCore’s DAT North American Freight Index this week, marking the sixth time in 2012 monthly volumes have been up year-over-year.

The index measures spot market freight availability on the company’s network of United States and Canada load boards.

TransCore also stated that August spot market freight volume was up on a sequential basis, topping July by 1.1 percent, which it said is on a “typical” seasonal pattern.

While there was a gain in sequential volumes, August, truckload freight rates dipped as is the norm on a seasonal basis from peak levels in June but were up annually, according to TransCore.

Dry van rates were down 5 percent from July but up 2.3 percent annually, and refrigerated rates were down 4.7 percent from July and up 5.8 percent year-over-year. Flatbed rates fell 1.1 percent from July and were up 2.9 percent compared to August 2011. TransCore said that rates are derived from the DAT Truckload Rate Index and do not include fuel surcharges, with spot market rates paid by brokers and 3PLs to carriers.

Even though August volumes were not at June levels tight capacity and limited truck availability has helped motor carriers regain pricing power, which was largely lost during the depths of the recession and has been trending back into carriers’ favor since mid-2010, according to anecdotal reports.

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 still high, and gas prices remain higher than they were a year ago at this time.

Typically, what drives higher volumes is a capacity shortage, said David Schrader, SVP/Operations for TransCore, in a recent interview.

“More freight tends to flow into the spot market…to brokerages and 3PLs as the economy tightens. That is what happened in 2011, and it is what we expect to happen in 2012, too. We would expect the same sorts of increases in the spot market going forward. It is a very good time to be in the brokerage space, and what you are seeing is brokerages that are capitalizing on the opportunity.”

Carriers are also benefitting from the spot market, too, according to Schrader, in the form of rate increases and utilization.

Despite these trend lines, shippers are holding their own in a market which currently sees carriers with the upper hand when it comes to rates.

“Our Carrier Management Program focus over the last few months has been increasing first time tender acceptance compliance,” said Joshua J. Dolan, director of transportation at Dick’s Sporting Goods in Pittsburgh, Pa. “We’re seeing our own internal need for spot freight reduce with the exception of expected instances. There are some potential issues with the amount of freight that has been routed through the West Coast with the potential ILA strike.”

Because of this, Dolan said his company could all see its existing carrier partners have a more difficult time supporting its West Coast surge demand. But he explained that Dick’s has also been working to increase visibility through collaborative planning to mitigate risk, and its carrier partners, he said, have done an excellent job supporting Dick’s overall increasing inbound demand and expect they will do the same throughout the balance of the holiday peak.

Robert W. Baird & Co. analyst Ben Hartford wrote in a research note that his firm’s “contacts note that spot truck demand in August has been below expectations” and “Paid deadhead to the West Coast has not materialized, unusual for late August, and contacts are not yet seeing the seasonal tightening of capacity off the US West Coast.”



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

Getting items ordered online to your home on a same-day basis is as important or relevant as it needs to be, and it depends on things like the type of products being ordered and its relative urgency as well. This was put into better perspective for me during a recent conversation I had with Dr. Victor Allis, CEO of Quintiq, a supply chain vendor specializing in a single optimization and planning platform.

Diesel prices dropped for the third straight week, with the average price per gallon seeing a 2.5 percent decline to $3.869 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

Seasonally-adjusted (SA) for-hire truck tonnage in June dropped 0.8 percent on the heels of a revised 0.9 percent (from 1.0 percent) increase in May and was up 2.3 percent annually.

Even as Congress was putting the finishing touches on a 10-month short-term funding extension to the federal aid highway bill that temporarily averts a funding crisis, Transportation Secretary Anthony Foxx was ripping the measure as a short-term “gimmick” that once again fails to adequately fund U.S. infrastructure needs in the long run.

ISI is comprised of Integrated Services, ISI Logistics and ISI Logistics South and is focused on the warehousing and transportation needs of automotive shippers. RRTS said that in 2013, Integrated Services generated revenues of approximately $21 million adding that Integrated Services is expected to be accretive to Roadrunner’s earnings in 2014.

Article Topics

News · Trucking · TransCore · Spot Market · All topics

About the Author

Jeff Berman, 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.

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