We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • ::COVID-19 COVERAGE::
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
Home » Truckload rates continue upward march
newsworthy

Truckload rates continue upward march

January 12, 2012
Mark B. Solomon
No Comments

Freight rates in the $350 billion to $500 billion-a-year truckload market have started 2012 by heading in the same direction as they did for most of 2011: higher.

According to analysts at Portland, Ore.-based TransCore Freight Solutions, spot market and contractual rates in January for the three main types of livery—dry van, refrigerated, and flatbed—are rising at close to the same pace they were at the end of 2011. Last year, spot rates rose 7.4 percent over 2010 levels, while contract rates increased by 6.5 percent, according to the consultancy, which tracks rates on 18,000 lanes in 135 U.S. markets and an additional 2,000 lanes in 14 markets in Canada.

TransCore analysts expect contract rates in 2012 to rise between 5 and 6 percent, and spot rates to increase by nearly the same level as in 2011. They caution, however, that forecasting full-year data in mid-January is an inherently risky exercise.

Most striking about the TransCore data is the unusually strong growth in flatbed rates. As of Jan. 9, the spot market rate for flatbed equipment stood at $1.68 per mile, a 9.1-percent increase from $1.54 a mile at the same time in 2010. Flatbed rates historically gain strength in the spring and peak around mid-year. Flatbed spot rates in 2011 peaked in June at $1.76 per mile.

What's unusual here, according to TransCore analysts, is that flatbed rates remained strong well into the fall of 2011 and showed strength again in January, a seasonally soft month. TransCore analysts say reasonably mild January weather in much of the nation could be contributing to the January gains. However, given that flatbeds are mostly deployed to carry freight used in housing and construction, the rate strength could be a sign of firming demand in those economically battered sectors.

Another factor driving up rates for all three equipment types is the continued scarcity of supply. TransCore analysts say shippers and brokers continue to have trouble finding consistent supply sources. Users are increasingly being forced to look to the fourth or fifth carrier choices because they can't obtain capacity at reasonable prices from their top three carriers. They're also being pushed into the spot market due to surges in demand that their contract carriers cannot accommodate, the consultancy said.

Capacity crunch continues
The tight capacity situation is unlikely to loosen up anytime soon. Transport advisory firm Transport Capital Partners said Tuesday that nearly three-quarters of carriers surveyed during the fourth quarter planned to add between zero and 5 percent capacity for the foreseeable future. This comes after a near 20-percent reduction in fleet capacity during the recession.

For the past half-year, carriers have been consistent in their refrain that, without a significant bump in rates to offset higher operating and investment costs, the most they can do is replace aging equipment—as opposed to expanding their fleets.

"Carriers tell us that rates are not covering investment risks nor are they close to covering the cost of the record prices of new trucks," said Richard Mikes, a TCP Partner and survey co-coordinator.

As the supply chain grapples with tight capacity, demand remains solid. TransCore reported about 60 million postings on load boards in 2011, the second-busiest year since it began keeping records in 1996. Only 2005, a period of relatively strong economic growth fueled by a credit and housing bubble, saw more postings, TransCore said.

Based on conversations with shippers and intermediaries over firming freight demand, TransCore analysts surmise that the nation's gross domestic product may grow at a 3- to 4-percent clip in 2012, faster than the 1- to 2-percent growth rate many analysts and economists expect.

Transportation Trucking
KEYWORDS TransCore Transport Capital Partners
  • Related Articles

    Echo CEO says truck rates to continue rising in 2018 as capacity stays tight

    Truckload contract rates strong in December; intermodal rates going lower, index projects

    Truckload index hits all-time high in March; intermodal index declines

Marksolomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

Recent Articles by Mark Solomon

Coming together for road safety: interview with Joshua Girard

Off the rails

Freight rate spikes shaking up the C-suite

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Cold chain giant Lineage Logistics buys its own rail operator

  • Autonomous trucking firm Plus prepares its tech for mass launch in China in 2021

  • The Home Depot opens automated DC in greater Atlanta

  • For container lines and ports, what a difference a year makes

  • Outlook 2021: What’s in store for logistics supply chain?

Now Playing on DCV-TV

Jlt procure rugged devices thumb

What it takes to procure the right rugged devices for your warehouse

DCV-TV 4: Viewer Contributed
Procuring new rugged devices for your warehouse is often a big decision and a significant investment. It needs careful planning and consideration. It involves more than ticking boxes on a spec sheet. It includes testing and getting employee buy in. And it's about finding a partner that can work with you to deploy...

FEATURED WHITE PAPERS

  • Proven Benefits: A Compendium of Slotting Optimization Success Snapshots

  • Bridging Information Gaps in Dock and Yard Operations

  • How Intelligent Sensor Solutions Turn Data Into Action

  • Order picking Solutions: Understanding Your Options

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2021. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing