May 2024 FTL Market Update

April was a great month to be a flatbed carrier in the FTL market comparatively. Flatbed spot rates rose .10c per mile throughout the month and have outpaced dry van rates by $1.32 per mile and reefer rates by .44c per mile. As anticipated, we did see a temporary drop in the national average for reefer rates throughout April as outbound produce shipping operations shut down and began their move to California. The reefer national average spot rate finished April .06c per mile lower than where it started. The dry van market continues to move sideways and a little down and finished April .05c lower than where it started.

By Mode

Reefer spot rates are experiencing the calm before the storm and we should see rates start to rise throughout May as produce season heats up in the West Coast. Imported produce from Mexico typically peaks in the next 2 weeks so expect some volatility and increased tender rejections in South Texas. Florida is wrapping up their produce season which has limited available capacity and next week will get an injection of freight for Mother’s Day flowers.

Flatbed spot rates are healthy and expected to continue to increase throughout the April to September construction season. There are some headwinds here reported by the US Census Bureau. New housing starts dropped by 14.7% in May and building permits dropped 4.3% month-over-month due to continued high interest rates. The flatbed market is the most insulated from oversupply due to the increased barriers to entry, so capacity is right sized for the current volume. We’re currently .03c per mile lower compared to this time last year.

Dry vans continue to sluggishly move along with not a whole lot of positive outlook on the horizon. We’re still in a capacity glut and spring retail freight has not increased the volume enough to make a significant change. We should see some positive movement with the injection of produce volume removing capacity from the dry van market, but it is still not expected to happen quickly.

CVSA International Road Check

CVSA International Road Check week is scheduled for May 14th -16th. Road Check Week is an annual 72-hour “safety blitz” and the largest commercial vehicle enforcement initiative in the world. Inspections will take place throughout North America. Last year 59,429 total inspections were conducted. 19% of vehicles were found to have violations causing them to go out of service until the violations were corrected and 5.5% of drivers were put out of service. This year the focus is on alcohol and controlled substance possession, and trailer protection systems (valves and hoses for air brakes). Many carriers will opt out of transporting freight during this window, so expect some decreased capacity and increased rates leading up to, during, and directly after Road Check Week.

May Projection

Rates for all modes should continue to move sideways through the first week of May and then start to climb the second week in anticipation of Road Check Week. Dry van capacity may be in a position where it will not have much effect and rates will quickly come back down and continue to move sideways. Reefer spot rates will likely continue to increase with the injection of additional produce volume.

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

-Josh Barrett, District Manager Texas