Good news for trucking companies: The spot freight market, the single largest source of freight for most small motor carriers, has shown significant improvement. According to TransCore's “Spot Market Freight Index,” freight availability in January rose by 54% in the North American market compared to January 2009. This marked the fourth consecutive month of improvement on a year-over-year basis.
The TransCore North America Freight Index measures truckload freight volume found on load boards supported by the DAT Network, including 3sixty Freight Match, TruckersEdge.net, and LinkLogistics, the company's Canadian subsidiary.
As expected, the report showed a month-to-month dip in spot market freight availability from December 2009 to January. Although the 38% decline exceeded seasonal norms, the gap can be attributed to December's unusually high level of spot freight availability.
This is very good news for the large number of small carriers that depend on the spot freight market for their freight. But even more significant is that the industry is starting to rise from the ashes of the Great Recession. One of the first positive signs of this is the spot market freight increase, reflecting manufacturers and retailers who are slowly increasing production and ordering.
Now, this doesn't mean we are out of the woods yet. It is going to take some time to return to pre-recession freight rate levels, but this is a big move in the right direction. The increase in freight volumes is the first step toward rates moving upward.
Improving your business still requires a lot of work and dedication. Some analysts are indicating we won't see another significant increase in freight volumes until the third quarter when expected inventories of manufactured goods will be low enough to require manufacturers to increase production. And how long this will be sustainable is anyone's guess.
Now is the time to develop new hauling relationships and re-establish old ones. Many shippers are going to develop a distribution plan that is vastly different from the one they used before the recession. The next several months will be the best time to start looking for hauling prospects. Start tracking spot market loads that are available and look for the ones that offer the greatest opportunity to work into a profitable hauling lane. Don't wait for shippers and brokers to come knocking on your door.
To be successful in the future and build that sustainable, profitable lane will require careful selection of who, what and where you haul. This requires a strategic hauling plan. The days of taking the best-paying load without a specific and comprehensive plan of how you stay within a defined freight lane are over.
‘Good news’ is good news only when you can use it to your advantage.
Contact Tim Brady at 731-749-8567 or at www.timothybrady.com
