NEWS

BLOG: FREIGHT DECLINE – FACT OR FICTION?

As 2017 began, several outlets released that the freight decline was coming to an end. And as it turns out, this prediction seems to be holding true. Supply chains across the industry typically see a decline in freight availability through April each year. But as of February, there has been more than a 100% increase in spot market volumes over this time last year. Capacity has continued to loosen and various factors have allowed rates to stay relatively stagnant.

 

One of the main indicators is a slow amount of contracted freight has been moving this year in the Southwest region. This has pushed normal “contracted carriers” into the spot market. Another major factor has been the influx of refrigerated carriers entering the spot market as well. The minimal demand so far in 2017 for refrigerated trailers has landed those drivers competing for spot van opportunities. This has allowed vendors to keep rates low for longer than usual.

 

But things are slowly starting to tick up. The demand for vans has increased over the last several weeks in many of the country’s larger markets such as Atlanta, Chicago, and Memphis. But even though there has been a small increase in accessible freight, the low number of available trucks has kept these major cities off the DAT Hot Market Map indicator.

 

Although vans and reefers are competing for seasonal opportunities, flatbed volumes have been increasing at a progressive rate which is ahead of schedule. Large volumes have entered into the North and Southeast primarily driven by oil productions.  Drilling in the Permian Basin, which is located in the western part of Texas, has increased the volumes of routes such as Pittsburgh to Houston. Pittsburgh has gushed up 28% in the past 5 weeks causing them to be the largest raising market in the area. Tampa and Birmingham have also increased just over a strong 20% in the same time frame.

 

Across the country, several factors are dabbling into what we consider the normal market cycle. We are seeing an influx in spot freight, weather patterns that are lasting longer than usual and slower production levels. The research points to FACT – the freight decline is over. Only time will tell what the rest of the 2017 Q2 has in store.

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