Will carriers bring home the gold as spot rates rise?
Axle
Logistics
Key Trends
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Spot rates continue to crawl off the bottom
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Sizable gains in both Dry Van and Reefer projected loadings
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Rate forecast and continued demand strengthen trucking conditions
Monthly
News
It’s not too early to start preparing for peak retail season
Things seem to calm down for a brief moment in July as we come out of the heavy demand placed on the broader network by the influx of produce. That demand tails off at the beginning of July as we move into the next phase of the logistics calendar, Labor Day and Retail Peak. Each carries their own unique demands.
- While the largest of the summer holiday logistics disruptions are behind us, Labor Day will provide supply challenges that should be prepared for. With many taking time to travel for the last of the warmer months or just to get outside, expect carriers to have driver staffing issues, with drivers taking time off coinciding with higher demand in areas like food & beverage, as well as consumer goods like charcoal for the summer closing cookout.
- CEO Carol Tome mentioned that a short holiday shipping stretch and anticipated volume growth justified heightened peak seasons surcharges starting as early as Sept. 29. UPS is expecting to encounter “the highest volume ever in our network” on Dec. 18, she added. “We think that the prices are going to stick because of what the environment is telling us from a demand perspective.”
Market
Trends
Supply Update
The Federal Motor Carrier Safety Administration revoked 17,558 carriers’ authority while granting 14,767 new authorities to carriers, resulting in a net drop of 2,791 carriers during Q2 2044. This is the smallest quarterly drop in for hire carriers since Q1 2022.
Demand Update
FTR reported much stronger loading projections in both Dry Van and Reefer services for the rest of the year after the Federal Reserve revised its forecast for Industrial Production at the end of June. Both Dry Van and Reefer saw 0.5% increases in projected y/y loadings, up to 2.4% y/y growth for Dry Van and 2.7% for Reefer
Market
Trends
Rate Update
Spot Rates dropped weekly through the month of July but finished with a higher monthly average than June at $2.07/mi (up from $2.06/mi). Spot Rates are now showing up 2.5% since May. Expect continued pressure on rates as demand has stayed positive and the carrier community continues to contract. As stated in previous months, capacity is still well above pre-pandemic levels.
Market
Forecast
Volume and Utilization numbers combined with still favorable fuel conditions (though slightly less favorable than May) kept the FTR Trucking Conditions Index in positive territory. Projected volume and increased utilization numbers are expected to continue through the year and into 2025. Rates continue to be a drag on the overall conditions and expect to remain as a negative component of the index until the beginning of 2025.
Speak to your Axle Logistics Consultant to understand how the market is impacting your specific industry and business!
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#AxleImpact
Axle’s July Community Spotlight was Wesley House! Axle has had a long-standing partnership with Wesley House Community Center. Their mission is to provide a multitude of services to support the Mechanicsville, Lonsdale, and Beaumont communities, located right around the corner from our HQ.
We’re excited to team up with Wesley House again for their annual Back to School Bash and are hosting an internal School Supply Drive to support this fantastic community event!
Did you know...
It took over 600 full truckloads to get 900,000 pieces of sports equipment to the 2024 Paris Olympic Games.
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