The latest data on freight conditions continues to show a positive trend for the industry as the spring shipping season approaches. FTR reported that its Trucking Conditions Index (TCI) for February is in modestly positive territory, while DAT Solutions’ North American Freight Index for March 2015 was the 20th straight month of higher average spot truckload rates year-over-year.FTR’s TCI for February sat at 7.4, reflecting a softening in capacity utilization due to the hours of service suspension and fluctuating diesel prices, FTR said. FTR expects the TCI to rise into the summer months and beyond, and it could hit double digit positive readings before 2016 as the industry anticipates another round of regulatory drag.Should the hours of service changes that were suspended last year be reinstated in September, the index would move up dramatically, according to FTR.Details of the February TCI are found in the April issue of FTR’s “Trucking Update,” published March 31, 2015. The ‘Notes by the Dashboard Light’ comments on slowing economic measures and how they may play out with regard to freight and trucking. Along with the TCI and ‘Notes by the Dashboard Light,’ the “Trucking Update” includes data and analysis on load volumes, the capacity environment, rates, costs, and the truck driver situation. “We are beginning to hear of push back from shippers about the continued rise in freight rates,” said Jonathan Starks, FTR’s director of transportation analysis. “While we still expect all-in per mile rates to be fairly flat for most of 2015, base rates for trucking (and specifically contract rates) are still showing solid year-over-year gains. Shippers are seeing two items that cause them to question the continued increases: fuel costs and spot market activity. Fuel costs are down 40% and, since fuel is about a quarter of trucking’s costs, it is a big deal. However, the decade-long gain in acceptance of fuel surcharges has made most of that impact a direct pass through to the shipper. It just isn’t going to show up in base rates any more.”Starks explained the other item is that spot market rates are well below last year’s levels.“There is just one word for why this happened: weather,” he said. “Spot market rates jumped 20%-plus during parts of 2014 due to the lasting impact of the Polar Vortex. While parts of the U.S. have had severe weather this winter, it has not been nearly as expansive as what we had a year ago. After accounting for the drop in fuel during the year, spot rates are only down modestly during 2015, but this is opposed to the gains being seen for dedicated and contract rates. It takes careful explanation to educate shippers on why trucking costs are going up – but it is certainly a necessity in order to attract and retain quality drivers. And drivers are something that both carriers and shippers want.”Spot market freight volume rose 34% in March 2015 compared to the previous month, a spring surge which is typical for the season, according to the DAT North American Freight Index, a measure of conditions on the spot truckload freight market.By comparison, March freight availability declined 28% year-over-year. The spring freight season usually begins in late March, but a prolonged winter in 2014 led to unprecedented volume throughout the entire first quarter, according to DAT.By equipment type, freight volume increased month-over-month: 34% for vans, 41% for flatbeds and 20% for refrigerated (“reefer”) trailers. Truckload freight rates on the spot market rose seasonally for all equipment types: van rates increased 2.5%, flatbeds added 2.8%, and reefers were up 1.7%, compared to February.Compared to the extraordinary market conditions of March 2014, year-over-year freight volume by equipment type declined 19% for vans, 42% for flatbeds and 1.3% for reefers, according to DAT.Rates trended up, however: van rates rose 2.5%, flatbeds were up 6.9%, and reefer rates rose 6.4 %, compared to March 2014. Monthly average rates have increased year-over-year for more than 20 consecutive months.Intermediaries and carriers across North America listed more than 120 million loads and trucks last year on the DAT Network of load boards. As a result of this high volume, the DAT Freight Index is representative of the ups and downs in North American spot market freight movement. In 2015, DAT re-formulated the Index with 2000 as the baseline year.Additional trends and analysis are available at DAT Trendlines.
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