Dive brief:

  • Truck announcements in the spot market started to show signs of growth in June, up 13% from May. It was relatively stable year-on-year, increasing 0.3% year-on-year, according to the latest DAT figures.
  • Demand remained higher than at the same time last year, with spot posts up more than 101% year-on-year, but posts were down 6% from May. DAT senior analyst Dean Croke said this was the result of more shipments to the contract market as carriers were able to secure higher fares there, reducing the incentive to focus on the spot market.
  • The entry of new capacity on the market as well as a drop in demand compared to May have made it possible to keep prices at the level. Van and reefer rates were down 0.2% and 0.1% from May, respectively, but were both still high compared to June 2020.

Supply is closer to demand in the spot market

Load-to-truck ratio

Dive overview:

DAT’s shipping figures correspond to the latest Broken Freight Index Report, which showed that deliveries fell 4.2% in June compared to May.

“The weaker federal stimulus has likely helped, but our discussions in the industry suggest that shipping volumes continue to be hampered by supply constraints, which range from shortages of drivers and trailers to TL and LTL to chassis shortages hampering intermodal capacity “, Cass written in his report.

But Cass’s fares and spending figures, which include information for freight outside the cash market alone, both jumped from May and June 2020. Fares were up more than 23% year-on-year and 12% compared to May.

Cass noted that month-to-month rate changes were due in part to the type of shipments that were in the market. “The proportion of smaller / cheaper LTL shipments in the dataset increased in May, then returned to a more normal level in June, and this change in mix pushed total integrated rates up in June. just like he brought the series down in May, “the report explained.

Cash rates in the trucking market have reached impressive levels over the past year and shippers are starting to see it in their contract rates, Croke said.

“Shippers had to deal with a lot of the supply costs which have increased throughout the year, and then they entered this period of absolutely insane spot price volatility at the end of last year. when they made their 2021 capacity offers, ”he said.

High rates, increasing shipments and slowing demand in 2020 have resulted in the spending figure for June rising to the “fastest rate on record” year-on-year, with an increase of more than 56 % year-on-year.

But higher contractual prices did not translate into strong capacity commitments.

“The limited capacity on the truck side means that carriers only accept about three-quarters of all [contract] loads that shippers send them, ”said Croke.

As shippers see an increase in demand for their products across industries, carriers are struggling to come to terms with this increase in volume, he said, noting that this is pushing them to look to carriers offering higher rates in the routing guide or in the spot market.

The rates of the contracts also keep increasing. DAT found that contracts entering routing guides increased 7% in the past two weeks compared to the previous two weeks.

“The fact that we are almost in mid-July and the contractual rates are still increasing by a factor of 7% in the last two weeks compared to the previous two weeks… this is what is really hurting shippers in this regard. moment “by causing higher supply costs,” said Croke.

The market has seen an impressive amount of capacity entering the market, approximately 60,000 new truck companies over the past year. But that still hasn’t been enough to meet the demand for the move, he said.

The shortage is due to a few factors, including equipment manufacturers struggling with component shortages and a shortage of drivers to sit behind the wheel of these vehicles. Croke noted that record wage increases have started to show signs of a return of workers in charge.

But when exactly the supply will start to meet the demand is more difficult to determine, especially with the peak season in a few months.

“Retailers are still catching up with the stock depleted around the same time last year,” said Croke. “They still have not restored the inventories to a level close to pre-pandemic levels.”



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