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The capacity index (supply) rose faster than the freight index (demand) for the seventh consecutive month and the 12th time in the past 14 months in March according to the most recent ACT For-Hire Trucking Index from ACT Research Co.

“In addition to ongoing weakness in domestic manufacturing, an inventory overhang continues to exacerbate new freight creation,” says Kenny Vieth, ACT’s president and senior analyst. “A return to normal inventory levels in the broader economy is the first step to improved freight market performance. However, to date the correction has been slower than expected in coming.”

Jason Cannon
 
 
Spot market freight volume got a 38% percent boost from seasonal freight in March, but the DAT North American Freight Index remains at one of its lowest levels in years, according to newly released figures.

Compared to February, van freight availability last month increased 25%, flatbed volume rose 64% and reefer volume added 16%. Despite this, linehaul rates on the spot market declined 1.4% for vans and 1.8% for reefers as flatbed rates increased just 0.6%.

Compared to March 2015, overall spot market freight availability fell 35%.

“Year-over-year declines have been a consistent pattern in every month since January 2015, due to a variety of economic factors including lower demand for transportation services in the spot market combined with loose truck capacity,” said DAT Solutions.

Demand declined 48% for vans, 45% for reefer trailers and 16% for flatbeds, year-over-year. Line haul rates fell 16% for vans, 11% for reefers, and 9.6% for flatbeds during this same time.

“A 51% decline in the fuel surcharge, which typically comprises a significant portion of the total rate intermediaries pay carriers contributed to a decline in all-in rates for all equipment types,” said DAT. “All-in rates for vans were down 21%, reefers declined by 17% and flatbeds were off 16%." The surcharge is pegged to the retail cost of diesel fuel.

The numbers are based on DAT’s network of load boards in the U.S. and Canada.

There is some hope that rates may finally be trending at least a little higher with week-to-week figures through early April showing some slight improvements.

Evan Lockridge

 
 
In certain parts of the country, especially the Southeast, the U.S. spot truck market is showing some early signs of renewal, as retailers gear up for their spring shipping season.

In the last week of March, Memphis was a hot market for truckers working the spot market, said Mark Montague, industry pricing analyst for spot market load matching service DAT Solutions. Memphis “is known for having lots of warehousing for consumer package goods,” he said.

Decatur, Alabama and Mississippi also saw higher spot market activity, Montague said, thanks to increased demand for lumber and construction materials.

DAT had already tracked an uptick in outbound spot loads from Southern California, as imports move inland from Los Angeles and Long Beach to Memphis. “Typically one follows the other,” Montague said. “Then you see markets like Atlanta and Dallas” heat up, followed by markets in colder climes, such as Chicago and the Northeast.

In the week that ended March 26, spot market outbound van rates from Memphis averaged $1.85 per mile, compared with a $1.56 per mile U.S. average and a $1.61 per mile regional average. Spot rates on the Atlanta to Orlando lane hit $2.19 per mile, though the average spot rate on the Lakeland, Florida to Atlanta backhaul lane was only 96 cents per mile, according to DAT.

Freight demand may be increasing in those markets, but overall, spot market rates are soft. The U.S. national average dropped 2 cents from the previous week. Excluding fuel surcharges, the U.S. national van average rate was $1.41 mile, also a 2 cent week-to-week drop. A year ago, that DAT average was $1.64 mile, a 14 percent year-over-year difference.

The reason for the underlying softness in van rates nationwide isn’t low consumer demand or high inventories, but lower volumes of fresh produce moving in spot market trucks, Montague said.

“Shipments of California strawberries are down, and in Florida winter rains disrupted the planning and yields of various crops,” Montague said. “Without impetus from the produce sector, you don’t see pressure on van rates. Reefer trucks are out looking for anything to haul and they’re competing with the vans. And as long as van rates are off, spot market trends remain subpar.”

Low spot demand for oil and natural gas trucking services also creates more competition in the dry van business, he said. And overcapacity among the contract motor carriers hauling most U.S. truck freight leaves shippers with fewer reasons to tap the spot market.

“We’re seeing growth (in the spot market), but it just isn’t popping without the mainstays of produce and oil equipment and drilling machinery,” Montague said. “Put those two together and it hurts a whole bunch of other things,” especially truckers’ bargaining power in pricing. "It really pays for truckers to understand that no two markets or round trips are created equal."

The Cass Truckload Linehaul Index, based on data including both contract and spot rates, has shown the annualized growth rate of truckload pricing dropping steeply after peaking in January last year, falling from 7.9 percent to 0.4 percent before rising to 0.5 percent in February.

Shippers are likely to enjoy lower spot market truck rates, compared with 2015 and 2014, for some time. “I don’t think you’ll see much happening on rates until the later part of the year,” Montague said, when pre-holiday shipping demand picks up and the effect of the coming U.S. electronic logging device mandate on small carrier capacity in 2017 becomes clearer.

William Ca
 
 
By Mark Montague

Four years ago, I wrote a blog post with a catchy title: "The Death of the Buck-A-Mile Backhaul," where I explained that carriers could no longer cover costs on $1.00 per mile. At the time, those cheap hauls were going away.

In March 2012, there was only one major van lane paying $1.00 per mile: Philadelphia to Chicago, at 48¢ for the line haul, plus a fuel surcharge of 52¢. Of course, truckers were spending more than $4.00 per gallon for diesel in 2012, and a lot of other costs had also risen well above historical levels. 

Fuel costs are way down now -- and so is the surcharge, at 14¢ for vans last week -- but other costs have gone up. Total operational costs couldn't be covered at $1.00 a mile in 2012, and they can't be covered now.

Yet, I regret to say, the "buck-a-mile" backhaul has returned to U.S. highways. Sure, those low-priced backhauls are paired with higher-paying head hauls, but not all roundtrips average to a profitable rate per mile.

Here is a rough estimate of the costs per mile to operate a Class 8 truck. Everyone's costs are different, but let's assume for a minute that these numbers are about average. 



Here's some more detail. You can plug in your own numbers. 

  • Fuel costs averaged $2.02 per gallon in the U.S. last week. Depending where you filled your tank, your costs will vary. Divide your cost per gallon by your mileage -- let's call it an even six miles per gallon -- and you get fuel cost per mile of about 34¢. Compare that with March 2012, when fuel was averaging $4.14 per gallon, or March 2000, when it cost $1.49. Big differences there.
  • Equipment lease costs have changed, too. A tractor and trailer might cost more than $130,000 now, or you might get a good deal on used equipment. On the upside, interest rates are at historic lows, but you might have more overhead now than you did in 2012. Maybe you have additional equipment that is sitting idle, or you have to pay to park your rig. I estimated that costs rose 21% for leases and overhead in the past four years. 
  • Maintenance and tire costs vary, depending on make and age of equipment. It seems clear that these costs have gone up since 2012, so I'll add 6¢ to my previous estimate, for a total of 39¢ per mile. You can substitute your own numbers. 
  • Driver pay has definitely increased since 2012, and 45¢ per mile may be on the low side for some fleets. (If you're the driver as well as the owner, you might not think about driver pay as a cost. That's between you and your accountant, but don't forget to pay yourself.)



Find Your Break-Even Number

If you add up all those costs, you get to $1.59 per mile or more pretty quickly. Whatever that number is for you -- and yours may be higher, especially if you have additional employees, an office, a yard or other indirect costs -- that's your break-even number. You need to average $1.59 -- or whatever your break-even number is -- for all miles, just to keep from losing money. 

In other words, when you take those buck-a-mile backhauls, you need to make at least $2.18 per mile on the head haul. Why? The average of $2.18 + $1.00 is $1.59. Remember, this does not leave you any profit, but it covers the bills. 

You could park your truck instead, and you'd save on fuel, driver pay, and some portion of the maintenance and tires, but you'd still have to make that lease payment. That's an indirect cost. You pay it every month, whether your truck moves or not. 

Right now, the national average rate for vans is $1.55. Remember that low-priced backhaul from Chicago to Philly? It pays $1.10 per mile this week, and the head haul is paying $2.01, for a roundtrip average of $1.55. 

Two Ways to Make Money on Buck-A-Mile Backhauls

If your cost is $1.59, you have two choices:

1. Get Paid More. Plan your roundtrips, and know what rates to expect. Look for a TriHaul route through Pittsburgh (see below) -- or specialize in a desirable cargo type, or agree to take low-priced loads only when they go into a "Hot Market" where outbound rates are high.



2. Spend Less. If you can't find a way to make more money, you'll need to cut costs. Because if your costs are similar to my estimates, $1.55 is not a good average rate for you. You've heard all the advice: Run your rig at a steady 55 MPH, don't idle the engine unless you absolutely have to, avoid out-of-route miles, and minimize deadheads. Maintain your equipment, to prevent costly repairs. 

By Mark Montague
 
 
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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Despite greater demand for truckload services, national average van, reefer, and flatbed freight spot rates all slipped for the week ending Feb. 27 compared to the previous week, according to DAT Solutions and its network of load boards.

Overall, the number of loads jumped 8.5% while available truck capacity rose 1.2%.

Van load posts increased 3% while truck posts gained 2%. The load-to-truck ratio held steady with 1.4 van loads for every truck posted on the DAT network. The national average van rate declined 4 cents to $1.54 per mile while its down 8 cents from three week earlier. Outbound rates declined in Los Angeles, Dallas, and Columbus, but Atlanta rates rose modestly in the most recent week.

All reported rates include fuel surcharges.

Reefer load posts fell 2% and truck posts were up less than 1% last week. As a result, the load-to-truck ratio fell 2%, from 2.9 to 2.8 loads per truck. The national average reefer rate fell 5 cents to $1.79 per mile, the lowest out of the past four weeks.

Flatbed load volume rose again, up 17%, while available capacity decreased 2%. That yielded a 19% increase in the national load-to-truck ratio, up from 10.6 to 12.6 loads per truck. The national average flatbed rate gave up 3 cents last week to $1.80 per mile and down 5 cents from three weeks before.

This happened as the national average price of diesel rose 1 cent from the previous week to $1.99 per gallon.

Preliminary numbers show in February compared to the month before, spot market rates declined as the total number of posted loads fell 2.4% and available capacity rose 12% compared to January.

Rates are expected to rebound seasonally in March, according to DAT.

By Evan Lockridge

 
 
When it comes to a driver's success throughout his or her career there will always be one factor that will stand out time and time again above all else...more important than the equipment you drive, more important than the freight you haul, and even more important than the company you were working for. The biggest factor in the level of success and happiness a truck driver will find will without a doubt be the dispatcher. Everything in trucking begins and ends right here....with dispatch.



Depending on whom you ask, dispatchers can go by many names. If you ask someone in middle management in a large company they may call them fleet managers, distribution specialists, driver managers, and other wonderful titles. They'll smile and say how these people are the backbone of the company and their knowledge, dedication, expertise, and heartfelt appreciation for the hard work their drivers put in has made their company grow into the industry leader it is today. 



If you ask experienced drivers about their dispatchers they may agree wholeheartedly with the middle manager's view. Or they may describe them more along the lines of being the most, â??idiotic son of a @&%(# I ever knew. That $&^@ is so %*#& $&^@ stupid I'd like to shove his $&$*@ in a $&@*# volcano!â?? 



I can't tell you how many times I've met up with drivers on the road that had the same dispatcher that I had and we had completely opposite opinions of that person. Maybe I was getting 3200 miles per week and home every weekend while the other person was getting 1800 miles per week and only allowed to go home every other weekend. 



Nobody will have more of an influence on your success as a driver than your dispatcher. He or she can be your best friend, worst enemy, or anything in between, sometimes all in the same DAY!!! Of course I can be that way too and without a doubt there have been a number of times I've brought that upon myself. But hey, I'm not on trial here so get off my back!! No, seriously though you will find out that you control your own destiny to a very large extent. Pretty soon I'll show you how.



For now, let's start with what exactly your dispatcher does. A dispatcher's duties will vary greatly from company to company. In a smaller company a dispatcher will have a lot more control and authority than in a larger company, generally speaking of course. First and foremost though your dispatcher will be the number one day to day contact point you will have with your company. Almost every single time you call or message your company it will be directed to your dispatcher. You will deal directly with each other one on one but you will not be the only driver your dispatcher will be handling. He or she will have anywhere from 5 to 60 different drivers on their â??boardâ??. A dispatcher's board is simply the group of drivers he/she is handling at any given time. If someone else's dispatcher calls in sick you may find that your dispatcher will have to cover his or her board that day and it will likely take you longer to get replies to your messages. 



Your dispatcher's first duty is to exchange information with you. All of your load information will be given to you by your dispatcher. Any questions, problems, or concerns you have will be directed back to him or her. Basically all of your normal, everyday communication with your company will be with dispatch. At times you will need someone with more authority or you may have an issue with you dispatcher personally and you need to talk with someone higher up. We'll cover those things in a little while. 



Dispatchers usually have the lowest level of authority within the company's office. Some dispatchers will also handle the â??load planningâ?? which means deciding which drivers get which loads each day. Often times in smaller companies the dispatcher will have this authority. In larger companies they may or may not. Often times a larger company will have a dedicated group of people, we'll call them â??load plannersâ?? that decide which drivers get which loads but the information is actually given to the driver by the dispatcher, not the load planner. I have worked within both systems and always found that the more authority my dispatcher had the better things went for me. Here's why:



Since you deal with your dispatcher directly day in and day out, nobody in your company knows you better. Your dispatcher knows how many miles you like to get each week, what areas of the country you like to run, how hard working and reliable you are, how flexible you are, whether or not you'll cheat on your logbook, how often you like to be home, what types of loads and how many miles you've been getting lately, and so on. If there is a load planner distributing the loads, that load planner likely doesn't know you or much of anything about you. Just like a dispatcher will have a group of drivers on his or her board, a load planner will likely have either a region of the country or a group of several different dispatchers that he or she is responsible for handling. I'll give you an example of how this can work. 



Say you are running regional and getting home every weekend. You like at least 2500 miles per week, you work hard, you're reliable, you've been with the company for five years, and you have a wife and three kids at home. On Monday load planner A gives you a 300 mile load from New Jersey to Pennsylvania for Tuesday. Now, on Tuesday you're in load planner B's region and you get a 200 mile run from western PA to Baltimore, MD for Wednesday delivery. Now, on Wednesday you are in load planner C's region and you get a 180 mile run back into New Jersey. If you normally shoot for 2500 miles per week and you're running 5 days and home weekends, then you're averaging about 500 miles per day normally. Well, here you are on sitting back in New Jersey on Thursday morning with only 680 miserable miles and you're supposed to be home in another day or two. There is no chance whatsoever you're going to have a good week this week. You may only get half the miles you were hoping for. Why did this happen? Why didn't you're dispatcher do anything about it?



See, in this type of system the dispatcher has less authority than the load planners. If a load planner says, â??this is the way it isâ?? then that's the way it is. Your dispatcher can not overrule the load planner. Now a good dispatcher who really cares about their drivers will beg and plead with the load planners to get you the best freight possible. The office in this type of system is in a constant state of lobbying. Deals are being made and compromises being sought day and night. But the problem is that the load planners often times don't really care. It's not THEIR drivers who are unhappy, it's the dispatcher's drivers. Besides, their job is to move the freight efficiently within their region, not to move it in a way that makes every driver happy. Once they move a particular driver out of their region it's not their problem anymore. Believe me I'm not making this stuff up. I've lived it. There's a reason that most companies have locks on the doors and bullet proof glass separating the drivers from the dispatchers and load planners. You think I'm kidding? I'm not. 



I once worked for a company that three months prior had a driver pull into the terminal, walk into the dispatcher's office, and shoot his dispatcher in the back of the head. Dead. The driver walked back out, sat in his truck, and waited for the police to come get him. Life in prison. Every word of it is true. When I say your dispatcher can make you mad sometimes, I mean REALLY mad sometimes. No joke.



Please visit www.truckingtruth.com for more information