Most trucking markets in the United States are stable or slowly cooling in terms of volumes, available capacity and spot rates. Rates out of Los Angeles in particular have been flat to down for a month.
We view this as a mid-cycle pause rather than an inflection in market fundamentals for a few reasons. First, tender rejections are still very high — and so are spot rates. We haven’t seen precipitous declines in either of those metrics — nothing to signal that trucking capacity is abundant once more.
Second, the wide divergence in spot rates based on destination, not origin, indicates that carriers are retaining their pricing power. We discuss the example of LA to Las Vegas and LA to Stockton in our Trucking Spot Rates section below; suffice to say that carriers have been able to maintain a high premium on lanes into unattractive markets relative to lanes into attractive markets.
Finally, shippers are raising contracted rates, tendering loads at higher prices and finding transportation providers willing to service their freight. In other words, flat spot rates and flat tender rejections should be read as signs that shippers have changed their behavior and transportation providers are capturing more top-line revenue.
You have selected content that's only available to members of FreightWaves Passport. As a member, you gain immediate access to the most in-depth and informative freight research available. It's your gateway to continuing education.
Members also get:
Access to exclusive community dedicated to discussing the most important challenges facing freight.
Monthly and Quarterly Freight Market reports keeping you informed of industry trends.
Much, much more!
Click below to learn more and sign up today!
Existing Passport subscribers may log in using the form below.
John Paul conducts research on multimodal freight markets and holds a Ph.D. in English literature from the University of Michigan. Prior to building a research team at FreightWaves, JP spent two years on the editorial side covering trucking markets, freight brokerage, and M&A.