The freight market appears to be following more seasonal trends offering better insight, but the OOIDA Foundation maintained a negative outlook overall.
In that market outlook, the Foundation concluded that volume and demand are flat and operating costs are high, while capacity is equalizing and rates are firming.
Van market
Regional truck-to-load ratios were lower in eight of the 15 regions with the greatest decrease in the Southeast.
Spot rates stayed flat and contract rates increased.
The inventory-to-sales ratio increased as monthly sales decreased.
Inventory levels are much lower than at the start of 2023, but demand has yet to materialize for furniture and home furnishings. Household appliances are showing very positive signs.
Seasonally adjusted retail sales increased for all three retailer types in July.
Flatbed market
Load-to-truck ratios were down in all but three regions.
DAT forecasts a steady decrease of spot rates through the rest of the year.
The seasonally-adjusted flatbed composite index declined again in June after ticking upward in May.
Housing continues to weaken as the FED holds interest rates steady due to inflation. It appears likely that the FED will cut rates when they meet in September, but it might take several months before we see the effect.
Building materials, garden equipment and supplies dealers continue to struggle with high inventories.
Reefer market
Conditions were favorable in the California, Upper Atlantic and Upper Mountain regions in terms of demand.
Spot rates remained flat, while contract rates increased and are expected to continue to do so through the end of 2024.
Carriers in the Florida region experienced the greatest in pay-per-mile, according to the U.S. Department of Agriculture’s truck rates.
The USDA also reported volumes decreased month-over-month. Volume increases were the most significant in the Mid-Atlantic and Mexico-New Mexico regions.
Capacity remained either flat or positive across the country.
Trucking market
Employment numbers decreased in July and are down year-over-year for the 14th consecutive month.
New and used truck sales both increased as new orders dropped. Preliminary used truck prices increased in July after declining in June. Year-over-year comparisons have been negative for 20 consecutive months, meaning that the overall freight market is still weak.
“If history is to be believed, August sales should jump a bit,” Steve Tam, VP at ACT Research said.
Transportation prices were at their highest level since May 2022, according to the Logistics Managers’ Index. This marks the third consecutive month that prices have exceeded capacity.
The average price for diesel increased to $3.83 per gallon, ending four months of consecutive decreases.
Freight market
Wages and salaries, as well as real disposable income, continue to grow year-over-year.
Manufacturing activity excluding pharmaceuticals and computer and electronics decreased both month-over-month and year-over-year. Two consecutive quarters of declining seasonally-adjusted manufacturing activity represent a manufacturing recession. The current recession has been ongoing for six quarters.
Imports and exports dipped in June, but continue to do well year-over-year. Imports are currently 16% above 2019 levels.
Growth in intermodal has remained strong throughout 2024, primarily due to international intermodal.
Read the complete freight market update on the OOIDA Foundation website. LL
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