The Better Things Get, the Worse They Are

Those of us who have been in the trucking industry for a long time will understand and appreciate that title.

I looked at some data on the number of loads processed in February and again on March 29, the last business day of the month. Overall, there was good news – van freight traffic is up 8.3%. Such a big increase should be enough to make things better everywhere, right?

Not so fast. Take Florida for example, (including southern Georgia) where there was a 3% increase in outbound loads. So rates went up, right? Not exactly. Inbound load counts increased 8% heading into Florida. So even though Florida has started to ship more outbound loads, there are more trucks in Florida looking for loads than there were in the previous month. That excess capacity will likely push rates down.

Brokers, 3PLs and shippers who are looking for trucks in busy states will appreciate the title, too. When there is improvement in the economy in general, or even in just one sector such as agriculture, housing or energy, freight volume expands, making it harder to find trucks.

In most cases, as things pick up, the capacity shortage will be most severe in the states that typically have a surplus of outbound freight. That is the case in California, where outbound freight is usually more robust than inbound. In March, a 19% surge in outbound loads from California exceeded the 16% rise for inbound loads. increased That 3% difference means rates are headed up, because the imbalance grew.

The strongest upward rate trend last month was in the Ohio River region. Outbound traffic grew 4.7% faster than inbound loads, so expect outbound rates to rise in cities such as Cincinnati, Evansville, and Louisville.

The trend toward imbalance has had very little impact in the Carolinas, but New England is trending down sharply, the Pacific Northwest is also trending down, and rates are likely to rise in the Lower Midwest, Upper Midwest and Upper Mountain regions. In those two "Upper" regions, from Minnesota to Montana, this is a reversal of recent trends, so yes, sometimes conditions actually do change for the better.

But most of the time, when business picks up, any usual condition gets worse. It could be a shortage of loads or a shortage of trucks, but an increase in business.activity will make that shortage more severe in almost all cases

Which brings me back to the title of this blog post: the better things get, the worse they are.

Categories: Rate Trend of the Week



Comments

About DAT

DAT operates the largest truckload freight marketplace in North America. Transportation brokers, carriers, news organizations and industry analysts rely on DAT for market trends and data insights derived from 256 million freight matches and a database of $60 billion of market transactions.

The Original Load Board - Trusted Since 1978

The company was established in 1978 as the Dial-A-Truck (DAT) load finder service at Jubitz® truck stop in Portland, OR.

TIA
OOIDA
CSCMP
MATS