The Owner-Operator Independent Drivers Association (OOIDA) Foundation has recently released its freight market outlook, painting a rather grim picture for the industry. The report, updated in April, indicates that volume and demand remain flat, capacity is still loose, rates continue to bottom out, and operating costs remain high. This negative outlook is a continuation from the Foundation’s March update, suggesting that the freight market is in a state of ongoing struggle.
The van market is underperforming compared to typical seasonal patterns. Load-to-truck ratios have decreased, now standing 44% lower than 2022 and 50% below the five-year trend. Spot rates have dropped for the fourth consecutive month and are 10% below the five-year trend. Contract rates also decreased in April, but they are 5% higher than the five-year trend. The increase in inventory-to-sales ratios and the decline in monthly sales have dampened truck demand and pushed rates downward.
The flatbed freight market has seen a decline in load posts by about 80% from last year, following a pattern similar to 2019. Equipment posts are at their highest level in seven years. Total construction spending increased, while spending on highways and streets decreased month-over-month. Housing starts were up after a 5% decrease in March. Building materials, garden equipment, and supplies dealers sales showed positive movement, which could potentially bring inventory levels down.
The reefer market continues to underperform, but there are signs of improvement. Spot rates saw a fourth consecutive month of decline, and contract rates dropped below $3 for the first time since September 2021. However, the U.S. Department of Agriculture reports that carriers in the New York region are earning more per mile than any other region. The Pacific Northwest is earning the least, at $2.58 per mile. Capacity tightened after two months of loosening, but overall capacity is still loose.
The Transportation Service Index decreased month-over-month after seasonally adjusted decreases in rail intermodal, water, air, and trucking, according to the OOIDA Foundation. Railcar loads and pipeline showed growth. The Cass Shipment Index also decreased, but there are some encouraging signs in terms of freight volumes. Truck employment increased, marking the second consecutive month of gains. New and used Class 8 sales both decreased, with new sales nearly 7,000 higher than used sales in April.
Fuel prices have been decreasing for a fifth consecutive month. After the 11-cent drop in April, the average diesel price is now 20% lower year-over-year. This decrease in fuel prices is a silver lining in an otherwise challenging market, as it can help offset some of the high operating costs that truckers are currently facing.
The current state of the U.S. freight market is challenging, with flat demand, loose capacity, and bottoming rates. However, there are some positive signs, such as the decrease in fuel prices and potential improvements in the reefer market. It is crucial for those in the industry to stay informed and adapt to these changing conditions.
Do not look elsewhere for dependable and effective vehicle, freight and heavy haul transportation than Ship A Car, Inc. We are committed to being your reliable partner for both new and used automobile shipment, providing attentive support at each stop along the way. Please call us at (866) 821-4555, and one of our helpful transport consultants will take you step-by-step through the car shipping process. Contact SAC right away to arrange for hassle-free auto transportation to take the first step toward a smooth and stress-free experience because we are the best car shipping company in the industry.
- What is the current state of the U.S. freight market? The U.S. freight market is currently facing challenges with flat demand, loose capacity, and bottoming rates. However, there are some positive signs, such as the decrease in fuel prices and potential improvements in the reefer market.
- What are the current trends in the van, flatbed, and reefer markets? The van market is underperforming with decreasing load-to-truck ratios and spot rates. The flatbed market has seen a decline in load posts but an increase in equipment posts and construction spending. The reefer market is also underperforming, but there are signs of improvement with carriers in the New York region earning more per mile than any other region.