July 2024 FTL Market Update

In June we saw positive signs from the truckload market and seasonal norms continued to emerge. We had some momentum with spot rates heading into June with Road Check Week and Memorial Day. Spot rates retained their gains through the first 2 weeks of June and surpassed the year-over-year comparison for the first time this year. They continued to increase in anticipation of the 4th of July. Freight volumes increased 13% week-over-week into the lead-up to the 4th which is nearly identical from a volume standpoint to the previous 8 years. Rejection rates went from 5.32% to 6.13% for dry vans and from 7.81% to 9.85% for reefers. The national spot rate average increased by .01c/mile showing there was still ample capacity to be found in the dry van market. The national spot rate for reefers stayed flat showing a softer-than-usual produce season.

Hurricane season is upon us and can be a major disruptor in the truckload market. Truckload is the mode with the least path of resistance, so is typically the first to see an increase in volume due to major outside factors. Port closures can lead to a backlog of hot freight that would normally move on the rail being diverted to move truckload causing a capacity crunch as well as an increase of volume for relief freight and utility repair. Texas was hit by hurricane Beryl this week which tragically claimed the lives of 8 people, left 2.5 million people without power, and closed port operations in Houston for 2 days. While this storm will affect local outbound capacity in the near term, it’s unlikely to have a national effect. Hurricane season is projected to be more active than usual this year and this is the first time we have had a Category 4 storm form in the Atlantic Ocean in June.

?Market Projection

The truckload market is currently following seasonal trends and tracking closely with pre-pandemic and softer market years. Volumes are healthy and expected to remain consistent over the next month. The capacity position continues to be tested with events and holidays and with each test things look to be getting better, but we are still oversupplied. Los Angeles imports are increasing and are expected to continue to increase as overseas shippers divert freight from East Coast ports to avoid possible labor disputes for their holiday retail season freight. Outbound Los Angeles truckload volume has increased 25% in the last month, so expect outbound rates to rise.

Dry Van

Dry van rates will likely settle after the holiday and fall on regional lanes however the national average (all lanes combined) should remain steady over the next month. The dry van market continues to be propped up by the produce season.

Reefer

We are still in prime reefer season and volume will remain elevated. This produce season is softer than most but is still adding some good volume to the reefer market. Typically, we see rates go down between the 4th of July slightly and then another push at the end of August in preparation for Labor Day. That pattern is likely to be the case for this year.

Flatbed

Flatbed volumes and rates are expected to continue to slowly decline as is normal for the flatbed season from now through October. Steel production has peaked. New housing starts are down 10% compared to this time last year due to higher interest rates, so the housing market is unlikely to add significant volume in the flatbed market.?

For more information or requests please contact Josh Barrett at [email protected] or [email protected].

-Josh Barrett, District Manager Texas