Axle Logistics Monthly Update - February 2024

Key Trends

• Winter storm moves across US causing network disruption for both shippers and carriers
• Net Revocations saw the largest quarterly total drop
• Gap between Contract and Spot rates continues to close

Winter Storm gives Spot Market a boost

A large winter storm moved across a large portion of the US causing many shippers and carriers to delay or close operations temporarily. Cities like Knoxville, TN, were covered in more than an inch of ice in many areas forcing businesses and schools to close for multiple days. As is typical with these types of weather events, both shipper and carrier networks were constrained which forced additional volume into the spot market. The week over week National Load to Truck ratios for Dry Vans shot up more than 12% between the weeks of 1/14/24 and 1/21/24 according to DAT’s Weekly Trendlines.

Supply Update

According to FMCSA, Net revocations of trucking authority – total revocations minus reinstatements of authority – totaled 5,852 in December, down about 1,000 from November. The total carrier population fell by 7,500 carriers in 2023Q4, representing the largest quarterly drop ever.

Projections in FTR’s Active Truck Utilization remain unchanged in the latest forecast. The outlook is for utilization to remain under 90% through May and to still be below the 10-year average of 92% by the end of the year.

Demand Update

Softer outlook for automotive loadings was the key driver in a weaker outlook for Dry Van Loadings according to FTR. Stronger projections in food loadings bolstered the projections for refrigerated loadings.

The FTR forecast for total truck loadings is a decline of 0.2% y/y in the latest update. A slight increase from a 0.3% decrease in the previous outlook.

Rate Update

As noted above, Spot Rates saw an expected surge with the winter storm across a wide portion of the country as typical network patterns were disrupted and equipment displaced. Rates seem to have fallen back to more seasonal patterns as both shipper and carrier networks worked through backlogs.

Contract Rates continued to show decline through January but expect the drop to slow as the gap between Spot and Contract rates continue to close. Contract rates continue to show a projected y/y decline in 2024 vs 2023.

The forecast for total truckload rates in 2024 excluding fuel is 1.7% lower than 2023 in FTRs latest reading, slightly weaker than the 1.4% forecast previously. The change in outlook was driven by slightly weaker forecasts in spot rates as well as a forecast on the contract rate side that was slightly weaker than previous expectations.

The Institute for Supply Management’s manufacturing index improved to 47.4% in December. This is the 14th straight month in contraction territory (the index considers a reading below 50 as contraction and above 50 expansion). The index did show more strength in the latest reading versus prior months. The new orders component eased 1.2 points to 47.1%. The production component increased 1.8 points to 50.3% – just barely in expansion territory.

Our Team

We're thrilled to welcome back the University of Tennessee Marketing 499 Sales Lab – The Axle Experience this semester! This innovative class offers sales education and hands-on training, and we can't wait to see the progress the students will make once again. Get ready for a semester filled with collaboration, growth, and real-world sales experiences!

Marketing and Sales Innovation Alliance - University of Tennessee

Jason Greenway, MBA

#AxleGivesBack

In January, Big Brother Big Sister Foundation, Inc. of East Tennessee hosted a lunch and learn session for our team, shedding light on their significant community impact and avenues for engagement.

Did you know...

Thanks to seasonal trends and the power of flower magic, DAT Freight & Analytics dishes the dirt on the uptick in truckloads, especially the chilled ones keeping those blooms fresh! With Valentine's around the corner, Miami sends out a whopping 500 truckloads of roses daily!