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Freight rates for long-haul truckers fell across all truck types in February as weak demand and plentiful space on trucks continued to make life hard for fleet owners.

Spot market rates, or the prices shippers pay for freight loads booked individually through brokers rather than under a long-term contract, were down 18% in February compared with the same month a year ago for dry vans, the most common type of big rigs, according to online freight marketplace DAT Solutions.

Rates for refrigerated truck loads and flatbeds, which generally carry perishables and industrial equipment, respectively, both fell 14% in February, compared with a year earlier, DAT said. Spot-market rates for dry vans, which haul everything from consumer electronics to clothes, have declined steadily over the past year, while contract markets have remained about the same, according to DAT.

The problem for carriers is that shipping demand in the spot market is falling—demand for space on trucks was down 29% in February from a year ago, according to DAT, while capacity is rising, with truck availability growing 18% in February.

“The spot market is as weak as I’ve seen it, and capacity is as available as I’ve seen it in 10 years,” said Clay Gentry, a vice president with North Carolina-based Transportation Insight. “It’s that easy to cover freight. It’s very much a shipper’s market as of now.”

Mr. Gentry said that the proportion of shippers using long-term contracts to move freight had probably crept up in recent months as retailers and manufacturers sought to lock in space. But he said he expects spot rates to rise in the spring and through the summer as more agricultural shippers start moving produce and construction crews take advantage of warm weather to start work on projects, pushing more shipping demand from that sector.

“Business is slow,” said Leif Holm-Andersen, chief executive of Gantt Trucking, LLC, which runs a fleet of about 130 refrigerated trucks in Lexington, S.C. “There’s a softening in the number of loads we’re getting, but I’m hoping that by mid-March we’re going to be back where we should be.”

Spot market rates and loads inched upward during the first week of March, DAT said, a hint that things might improve for carriers as the weather warms.

Eileen Hart, vice president of marketing for DAT, said that another explanation for the softness in the spot market has been the lack of major winter storms. Extreme weather often forces shippers to place loads individually in the spot market to meet increased demand and account for truck drivers who have been stranded or delayed by extreme weather.

“In 2016 we’ve had a really mild winter,” Ms. Hart said. “You don’t have any of the stocking up that cripples the supply chains…so the smaller trucking companies are having a hard time finding enough freight to move.”

By ROBBIE WHELAN
 


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03/02/2017 3:28pm

When the demand goes down, the capacity should go down too. However, it’s different now. Maybe it’s because clients are looking for cheaper trucking services than before. They are wiser that they don’t want straight contract. It’s like looking at the black market for some easy deals. We can’t blame them because they also have expenses that they need to cover up. Deals should be beneficial one way or another.

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Is she still vice president for that company? Nothing changes since that?

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Hope spot market rates will be higher the next year! I'm working on it ;)

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According to our prognosticator the rates would rise up in the next year.

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