What Happened to Freight Rates: FTR Week 50 Report

Spot rates for freight shipments saw declines across all equipment types during the week ending December 13, according to the latest report from FTR, reflecting seasonal trends typically seen after Thanksgiving. The Truckstop system data showed decreases in broker-posted spot rates, total load activity, and the Market Demand Index, but year-over-year comparisons paint a more nuanced picture of the market and freight rates.

Freight Rates and Seasonal Adjustments After Thanksgiving

The decline in spot rates during week 50 aligns with historical patterns, particularly given the distortion caused by this year’s late Thanksgiving holiday. Refrigerated (reefer) spot rates experienced a significant drop, which is typical for the second week after Thanksgiving. Dry van spot rates also declined, but notably, the decrease was the smallest for this post-Thanksgiving period in more than 15 years.

According to FTR’s report, total load activity fell by 9.5% after a rebound during the prior week. However, on a year-over-year basis, volume was up 12% compared to week 50 in 2023 and 8% higher than the second week following Thanksgiving last year.

Market Demand Index Reflects Mixed Trends

The Market Demand Index (MDI), which measures the ratio of load postings to truck postings, fell from the previous week’s elevated level but remained at its highest point in over a month. Despite the seasonal decline in rates, total truck postings saw a significant increase of 14.1%, marking the largest rise in 13 weeks.

This dynamic highlights the balance between declining spot rates and increased truck capacity during the post-Thanksgiving period.

Dry Van Spot Rates: Modest Decline Amid Stronger Year-Over-Year Numbers

Dry van spot rates declined by 2.5 cents after three consecutive weeks of increases. While rates typically drop during this period, this year’s decline was the smallest recorded since at least 2008.

Dry van rates were 3.7% higher than the same week in 2023 and 2.4% higher than the second week after Thanksgiving last year. Load volumes, however, decreased by 7.2% from the previous week and were 4% below the corresponding period last year.

Reefer Spot Rates: Seasonal Drop but Strong Year-Over-Year Growth

Refrigerated spot rates saw a sharp drop of more than 13 cents, a typical pattern for the second week after Thanksgiving. Despite this decline, rates were more than 6% higher than during the same week in 2023 and nearly 4% higher than the equivalent post-Thanksgiving week last year.

Load activity in the refrigerated segment fell by 20%, although volume was still 7% higher than the same week last year and 2.4% above the second week following Thanksgiving in 2023.

Flatbed Spot Rates: Slight Decline Despite Volume Growth

Flatbed spot rates decreased by just under 2 cents, effectively reversing gains from the previous week. Rates were nearly 3% lower than during the same week in 2023 and the second week post-Thanksgiving last year.

Flatbed load activity declined by 9.6% week over week but remained robust compared to 2023, with volume up by around 23% for both week 50 and the second week after Thanksgiving.

Pre-Christmas and Year-End Freight Rates

As the market moves into the week before Christmas, historical trends suggest dry van and reefer spot rates may continue to decline slightly, while flatbed rates could see modest gains. The week that includes Christmas is typically marked by some of the strongest rate increases of the year due to capacity shortfalls.

FTR also notes that the final week of the year often sees continued strength in van equipment rates, though flatbed rate performance tends to be less consistent.

Key Takeaways for the Trucking Industry

FTR’s latest spot market report underscores the influence of seasonal patterns on freight activity. While the week following Thanksgiving generally brings declines, year-over-year comparisons show significant improvements in rates and volume across many categories.

For stakeholders in the trucking industry, these trends provide insight into how demand, capacity, and seasonal adjustments interact, offering opportunities to plan for the end-of-year freight surge.