How Spot Rates Hit Their Lowest Level This Year: FTR Exclusive Report

Trucking Spot Rates Hit Lowest Levels Since July 2020

Overview of Spot Market Rates

Recent data from FTR and Truckstop shows that spot market rates have dropped to their lowest point since July 2020. This happened during the week ending August 23, 2024. The main reason for this decline is a big drop in flatbed rates, which has caused a decrease in rates across different types of freight. These changes reflect a challenging period for the trucking industry as it deals with seasonal changes and varying market demands.

Decline in Total Spot Rates and Market Demand

Total spot rates, which are the prices posted by brokers on the Truckstop system, went down by nearly 4 cents in the week ending August 23. This followed a drop of almost 3 cents the week before. Now, these rates are about 3% lower than they were during the same week last year, which is the biggest year-over-year drop in 11 weeks. Additionally, these rates are about 10% lower than the five-year average, making this the weakest performance so far this year.

The total number of loads also decreased by 0.7%, continuing a trend from the previous week, which saw a decline of more than 2%. Compared to the same week in 2023, load postings were down 14%. This marks the largest year-over-year decline since the beginning of this year. The current load postings are nearly 39% below the five-year average. On the other hand, the number of trucks posted increased by 10.1%, leading to a drop in the Market Demand Index (MDI)—the ratio of load postings to truck postings. The MDI is now at its lowest point since late December 2023.

Continued Drop in Dry Van Rates

Dry van spot rates fell by 3.4 cents, marking a decrease in six out of the past seven weeks. These rates are now more than 4% lower than they were during the same week in 2023. This is the weakest year-over-year comparison since March, and they are nearly 15% below the five-year average for this week. This trend is unusual, as dry van rates typically rise during week 34, having only dropped once from 2016 to 2023.

This decline in dry van rates goes hand in hand with a 0.8% decrease in dry van load activity. The volume of these loads is now at its lowest level of the year, except for the week of Independence Day. Compared to the same week in 2023, load postings are down more than 25%, which is the largest year-over-year deficit of the year. They are also about 44% below the five-year average for week 34.

Small Increase in Refrigerated Rates

While most rates went down, refrigerated spot rates saw a small rise, going up by two-tenths of a cent after dropping 1 cent the week before. This minor increase follows a trend where refrigerated rates have technically risen in three of the past four weeks, though the total gain is less than 4 cents. Historically, week 34 usually sees solid gains for refrigerated rates.

Despite this slight rise, refrigerated rates are still 5.5% lower than the same week last year. This is the biggest year-over-year drop since March, and they are about 11% below the five-year average. Refrigerated load activity increased by 1.7%, but volumes are still almost 20% below the same week in 2023 and about 39% below the five-year average for this week.

Sharp Decline in Flatbed Spot Rates

Flatbed spot rates saw their steepest drop in nine weeks, falling 5 cents after a more than 3-cent decline the previous week. Rates have been falling for 10 straight weeks, following typical seasonal patterns where rates usually weaken in July and August. However, the current rates are nearly 2% below the same week in 2023 and about 8% below the five-year average for this week.

Flatbed load activity also declined, dropping by 1.2% to its lowest level since the beginning of the year, excluding the week of Independence Day. Compared to the same week last year, load postings are down more than 4%, marking the first negative year-over-year comparison in seven weeks. They are also almost 41% below the five-year average.

Looking Ahead in the Trucking Spot Market

The week ending August 23 is an important time for understanding the trucking spot market, especially as the industry approaches the Labor Day weekend. This period is usually when spot rates for van equipment see strong gains. However, current trends show a tough market environment, with spot rates and load activities falling significantly behind historical averages. The next few weeks will be crucial to see if the market can recover from this downturn or if more declines are ahead.

As the trucking industry continues to face changing demands and rate volatility, it is important for carriers and brokers to stay alert and adjust to these market shifts. The ongoing challenges highlight the need to closely watch market trends and be ready for possible changes as the year goes on.