Trucking and Freight Market February 15: Load Rates Are Down Again, and Diesel is UP

This is a video review of the content presented by Miranda at Trucking Made Successful:

https://youtu.be/buEQhNMife4?si=W-Ka02kATs7IWVJ7

This video provides a comprehensive overview of the current state of the trucking and freight market as of February 15, highlighting the dynamics of load rates, diesel prices, and the impact on various types of carriers. Here's a detailed summary:

• Capacity Changes: The video begins by noting a net loss of 253 carriers week over week, indicating more carriers are leaving the industry than entering. However, there's a concerning trend of decreasing exits, which could hinder market correction.
• Spot vs. Contract Rates: Contract carriers saw a decrease of 3 cents per mile over a week, earning approximately 48 cents more per mile than spot carriers. This indicates a continued squeeze on carrier earnings.
• Volume Trends: Volumes remain significantly higher than 2023 levels but have shown a downward trend over the past month. The video suggests this might be due to February's traditionally low demand, with hopes for an uptick in mid-March.
• Rejection Rates: There's disappointment in the declining rejection rates, currently at 4.81%, a 0.35% decrease week over week. Despite being above 2023 levels, this trend could indicate a weakening in market leverage for carriers.
• Diesel Prices: Diesel prices are highlighted as a significant concern, with a national average of $4.11 per gallon. The sharp uptick in prices, alongside decreasing rejection rates and increasing expenses, paints a grim picture for carriers.
• Specific Segments Analysis:Dry Vans: Spot volumes continue to decline, falling below 2023 levels. The average rate for dry vans has dropped below $2 per mile, signaling worsening conditions for these carriers.Reefers: Similarly, reefer volumes on the spot market are down from 2023, with rates also declining to $2.26 per mile. Twin Falls, Idaho, is mentioned as a relatively better market for reefers, though overall conditions are challenging.Flatbeds: After weeks of stagnation, flatbed volumes saw a slight increase but remain below 2023 levels. Rates for flatbeds decreased to $2.35 per mile, not reflecting the expected seasonal increase in rates.

The video concludes with a broader discussion on the freight market dynamics, pointing out that not all spot market loads originate from rejected freight by contract carriers. It also touches on shippers' strategies, such as relying less on the spot market and expanding private fleets to save on transportation costs.

Insights based on numbers:

• The trucking industry is currently facing a precarious balance of decreasing carrier entries and exits, indicating a potential for long-term market challenges.
• Diesel prices are a critical concern, with a sharp increase to $4.11 per gallon, impacting carrier operating costs significantly.
• The spot market for both dry vans and reefers shows a concerning trend of declining volumes and rates, highlighting the need for strategic planning for carriers in these segments.

The questions I would like to see asked of carriers is this?

1. How does the current diesel price affect the overall profitability of trucking operations?
2. What are the implications of the decreasing trend in carrier exits for the freight market's future?

Feel free to ask any questions related to the video's content.

Thanks for Reading! #TruckingIndustry

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