Rates cooled after the Fourth of July, as they usually do. What’s different is how fast this market moves when conditions change.
Dean Croke sat down with Ken Adamo, chief strategy officer at EASE Logistics, to talk through where freight stands heading into August. Ken spent years on the data side at DAT and now runs pricing strategy at a brokerage that buys DAT data, so he’s watching this market with real loads and real carriers on the line.
His read: this cycle is running on supply, not demand. A market held up by tight capacity behaves differently than one held up by volume.
Volumes are down, but rates are up
Spot rates cooled after Independence Day, but off a higher floor. Year over year, DAT is seeing lower volumes and higher rates at the same time.
Produce out of the West Coast makes the point. Year-to-date volumes were down about 8% through late July, while rates were up 40% to 50%. Rates up, volume down. That points to changes driven by capacity, not demand.
Flatbed rates excluding fuel are running well above pandemic levels, and after nearly two years in negative territory, new rates are up about 13% in recent weeks. Dean’s read: flatbed demand is pushing into uncharted territory, driven by AI infrastructure buildout. Dry van and reefer are climbing back but still aren’t close to pandemic-era highs.
For Ken, the speed of the post-holiday correction settles it: demand-driven markets just don’t snap back that hard.
Carriers and brokers misread the holiday signal
The end of June and start of July stacked quarter-end, month-end, and a holiday into the same seven days. Some carriers read that as proof the next two years would look like 2021, and came in that Monday asking $8 a mile from New Jersey to Maine. They didn’t get it. By then, the holiday-week shortage passed.
Brokers misjudged the holiday signal, too. Ken walked in that Monday to find conversion at half of what it should’ve been; his team had missed how hard the market would correct. A smaller version of the same thing happened two days before this conversation: a 200- to 300-basis-point drop in conversion, which is a lot when you win only a fraction of the spot loads you bid on. EASE adjusted pricing midday and watched conversion recover.
Two numbers drive that call: participation, the share of offered loads you choose to bid on, and conversion, the share of those bids you win. A good week is one where margin lands where you want it, conversion holds, and the pricing model predicts what happens. The three weeks before this recording were stable, which makes that prediction more accurate. But Ken still calls the market sensitive, and the holiday whiplash is why.
Tightness shows up unevenly through the day, too. Loads going out between 7 and 11 a.m. move without much trouble. The loads still on the board at 4 p.m. are a different conversation, and carriers know it.
Shippers are absorbing the first round of repricing
Contract rates trailed spot through most of the downturn. Ken figures 10% to 15% of that pent-up repricing has landed or will shortly, and it’ll start showing up in paid rates.
There’s not much left to argue about, Ken says. Every shipper he talks to has recognized it by now, some earlier than others. The open question is whether one round of repricing covers it (shippers believe it should). Ken doesn’t expect Q4 to add another 40% or 50% on top, and would call it a shock if it did.
The correction hit hard enough on the service side that Ken doesn’t know a single company that didn’t fail somewhere between Memorial Day and the Fourth of July. EASE, in his words, was lucky to fail early.
Why today’s higher rates don’t feel like 2021
Freight costs have gone up, but so has everything else. Ken’s conservative estimate: costs are maybe 20% higher, compounded, since the pandemic, which means inflation-adjusted rates are still well below those peaks.
Compared to the pandemic, the big difference today is demand. Five years ago, demand made high freight costs tolerable. A patio furniture manufacturer with freight costs up 70%, prices up 50%, and volumes up 500% wasn’t losing sleep over freight spend. Today, that shipper is facing flat demand, rising credit card debt, and high interest rates. It’s a different calculation.
That’s why today’s high rates haven’t produced 2021-level results. Some carriers are doing better, but it’s sector-dependent, and the broad relief that came with pandemic demand isn’t there.
Any brokerage with meaningful contract freight took a hard margin hit in Q2 without the spot volume to offset it. Ken expects Q3 to look considerably better.
The question neither Dean nor Ken can answer yet: what happens to the rate curve if broad-based demand returns while capacity stays tight?
The “borrowed employee” verdict and what brokers should do
A recent Texas jury verdict, still headed to appeal, brought the term “borrowed employee” into the broker liability conversation. In the case at issue, the driver reportedly said he was sick and was dispatched anyway.
It raises the question: can a broker be held responsible for what a contracted carrier’s driver does behind the wheel?
Ken isn’t a lawyer, but his operational take is simple: brokers shouldn’t be dispatching drivers. Trucking companies are independent businesses making independent decisions. If the relationship blurs and a driver is found to be a borrowed employee, the broker’s liability questions run to wages, benefits, and federal contracting standards.
For many brokerages, the response to earlier liability cases has been more documentation and outside counsel. That said, no protection is guaranteed. The carrier in the Texas case wasn’t a red flag on paper; FMCSA had rated it satisfactory. Clear policies and standards matter, but they’re no substitute for how you handle a driver who says he’s not fit to drive.
Then there’s the data question. Dean raised the “strong solo” problem: drivers running a thousand miles a day, often on tampered ELDs. Track and trace generates a record of where that truck was, and when, which will be discoverable in your system if you assign a load that a driver could only make by violating hours of service.
Ken’s take: brokers don’t want hours-of-service data, and shouldn’t be judging it. That call belongs to the owner-operator or the fleet’s compliance manager. As Dean put it, a driver can be fully compliant with hours of service and asleep at the wheel at the same time. Ticking boxes doesn’t erase the exposure.
