Trucking Hitting its Low
The trucking freight cycle has potentially reached its lowest point, with analysts noting nearly two years of negative year-over-year contract rates. Recent Q2 2024 data reveals improvements in dry van, reefer, and flatbed rates, signaling a possible market transition. FTR reports a significant increase in new trucking authorities and applications for transportation and warehousing businesses, indicating a bottoming out of the market. Additionally, dry van spot rates, which hit their lowest in April, show signs of recovery.
Jason Miller from Michigan State University suggests that while spot pricing for dry vans has likely hit bottom, contract prices may soon follow due to adjustment lags. He introduced a dry van spot market cycle indicator, using a ratio between contract and spot rates to gauge market conditions. Currently, the market is not yet ready to turn, with a threshold of 15.8% indicating a bearish market.
The trucking sector has experienced a prolonged down cycle, with dry van spot rates remaining lower year-over-year for 27 consecutive months. However, DAT’s Chief of Analytics, Ken Adamo, believes sustained positive growth over a quarter will signal a market turn. Despite the challenging environment, companies like J.B. Hunt Transport Services and Heartland Express are showing cautious optimism for improvement, possibly extending into 2025.
TLC is monitoring these trends closely to optimize our logistics strategies and support your freight needs effectively. Contact us today to discuss how we’re navigating these changes and what it means for your shipments.
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