Market decline

Spot Market Decline Accelerates as Demand Falls

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The spot trucking market is experiencing an accelerated decline as pre-pandemic conditions return.

The coronavirus pandemic has led to increased demand and supply chain constraints over the past two years, pushing many shippers looking for capacity to the spot market.

But this year has seen the cash market approach pre-pandemic norms.


“We’re starting to see a steeper decline, or correction, back to a familiar market,” spokesman Brent Hutto told Transport Topics. “It’s still above normal, still significantly above normal. But it is declined every week. So that’s one thing. Rates have not necessarily followed because fuel prices continue to rise. data shows that total load availability hovered around 300 points at the start of the year.

It peaked at 320.12 in the week ending March 7. Load availability started to slowly drop from there, with occasional jumps along the way. The week of Memorial Day saw this decline begin to accelerate until reaching 222.73 for the week ending June 27.

“We see him correcting a little faster than normal,” Hutto said. “We don’t see less freight in the overall market. We are seeing a correction in contracted freight that had been pushed into the spot market because it was rejected at the rates at which it was contracted. More of this freight remains in the contract market.

Data from showed that total load availability recovered a few points to 240.88 points in the week to July 4. But vacation weeks are often outliers, so the slight pick-up in available loads isn’t necessarily an indication that the overall trajectory has changed.

Dean Croke


“It’s normalizing quickly and that’s what’s turning some people off and making headlines,” Dean Croke, principal analyst at DAT Freight & Analytics, told TT. “We are returning to more normal freight market behavior and seasonality is sort of reappearing, albeit a bit different. We haven’t seen this strong return to seasonality because spot rates don’t rise in the four weeks leading up to July 4, which they normally do. »

Croke noted that dry van spot rates are still 26 cents per mile higher, excluding fuel surcharges, than the June average of pre-pandemic years 2015 to 2019.

“Part of the problem, however, is that operating costs have also increased,” Croke said. “Rates aren’t as good as they were last year, but they’re still okay. We’re not going to see this massive exodus, I don’t think, provided diesel drops.

Hutto noted that due to fuel surcharges, fares did not reflect carrier spend. But from the shippers’ perspective, it looks like rates have barely budged even as demand plummets. Data from shows rates have remained around $3.13 per mile all year.

“What we’re seeing is freight starting to stay in the contract market and not entering the spot market where prices are much higher,” Hutto said. “So it started right after Memorial Day weekend,” when the market started to correct.

Hutto added that the declines were not a sign of a freight slump given that spot demand is still above historical norms. But it is something he is still monitoring as well as the potential for a cargo boom given seasonal trends and a backlog of ships from Asia. But for now, he sees the most likely outcome as a correction closer to normal trends.

“Loading station volumes as a measure of spot market demand have declined,” Croke said. “But it’s not a big surprise given the high level of contract rates. So if we talk about loading dock volumes, it’s about 10% lower than this time in 2018. But about 32% lower than last year.

Croke noted that although loading positions are lower than last year, the current market is more reflective of previous cargo cycles. He pointed to the relatively strong freight environment in 2018 in particular.

“The flip side is the capacity in terms of truckers displaying their equipment on loading signs,” Croke said. “The demand looks like 2018, but the supply of capacity looks a lot like it did in 2019. And that’s part of the reason why we’re seeing spot rates go down and contract rates start going down, c is because we are now in a market that is in excess of demand.”