There are differing opinions on what way the economy is trending overall. Although, when it comes to analyzing the economy’s effect it has had on the current state of our market, it seems to be transparent.
The effects may vary from positive to negative, but all together have created a more balanced market than we have recently been seeing. Specifically, when looking at a load to truck ratio of 3.53:1. Note that a 3 to 1 ratio is considered a balanced market, with anything under being loose and anything over representing tightness.
The Van LTR has recently increased by 6.1%, along with Reefer LTR which has increased by 13.2%. This trend within Reefer LTR is due to the beginning of produce season. When it comes to spot rates they are expected to rise, as seen when the 4th of July approached. Analyzing contrary effects, Flatbed LTR has decreased by 10.5% with an expectation that this will be consistent due to the high number of houses considered “under contract.” The national average is typically around 500,000; however, the current market is 840,000.
Not only has the current state of the economy influenced the load to truck ratio, but it has also had an impact on truck drivers. As we have all experienced, the cost of fuel has increased drastically. Comparing rates from just May-June, fuel has increased by 8.8%. Year to date, the cost of fuel is up 73.2%. There may be light at the end of the tunnel. The cost of fuel is looking to level out over the month of July and expected to eventually decline before the year ends.
Lastly, inflation has also had a negative effect on the current market. Soaring inflation has caused a decrease in consumer spending. This decrease could have an adverse effect on growth of the economy which will also impact various areas of the supply chain.
At Axle Logistics, we believe that driving efficiencies through the transportation process by executing transparent communication and providing proactive solutions in turn allows our clients and carrier partners to focus on what they do best… growing their business. Contact us today to learn more about how we can facilitate safe, reliable, advanced services for you and your company.