Some freight market conditions have shown promise recently, but that’s not expected to last.
The OOIDA Foundation indicated in its December freight market update that overall U.S. manufacturing continues to shrink and the housing market remains soft.
“While van and reefer rates increased, this was primarily driven by seasonality,” the Foundation report stated. “Recent weather disruptions temporarily tightened capacity. Unfortunately, significant headwinds remain in place.”
Van market
Demand declined unseasonably despite Black Friday and the peak shipping season. The decline was attributed to a sharper decrease in freight relative to capacity.
Ratios were more favorable for carriers in the Midwest and Mountain Central regions. However, all six regions experienced a decrease, the largest reported in the Northeast.
Spot rates were up month-over-month. Increases were reported in most regions, the largest being in the West Coast region. The most significant decline came in the Northeast.
Flatbed market
A decline in demand is typical this time of year across flatbed. A 29% decline marked the eighth decrease in nine months.
The lone increase was reported in the Mountain Central region, while ratios were also more favorable in the Southeast.
Rates followed demand and dropped month-over-month. A year-over-year increase was reported, but rates are well below the three-year moving average.
Reefer market
Lower demand was the norm. Ratios remained higher than last year, and were best on the West Coast and in the Northeast.
All but one region saw increased rates, which are up year-over-year for the fifth consecutive month.
The spread between the spot rate and the three-year moving average increased by 10 cents.
Trucking market
The rise in the Cass Shipment Index doesn’t appear sustainable.
“Frigid December weather, featuring three storms so far, is pinching spot capacity pretty hard during one of the seasonally strongest periods of the year for demand, sending spot rates up in recent weeks,” Cass said. “The stormy winter combines with tightening capacity and contributes to the eventual cycle turn.”
Estimated for-hire entries continued to move in harmony with historical seasonality.
U.S. sanctions on Russia’s top oil producers, combined with OPEC’s decision not to increase output, have resulted in higher U.S. diesel prices.
The used truck market was typical of the season.
Freight market
Decreases in two of the four demand indicators outweighed gains in the new export orders and customers’ inventories indexes. Of the 17 industries, 11 reported contraction in November.
The Housing Market Index declined for the eleventh consecutive month.
“In a further sign of ongoing challenges for the housing market, the latest HMI survey also revealed that 40% of builders reported cutting prices,” the National Association of Home Builders said. LL
Read more business news.
Credit: Source link
