After months of decline, the spot market is creeping upward in the U.S., just not to the heights of 2018 and out of the depths they plunged to by mid-2019, reports the Journal of Commerce.
Unlike the sudden explosion of freight demand in the fall of 2017, which tightened truck capacity and sent rates soaring, this year’s expansion is “muted,” said Lee Klaskow, Bloomberg Intelligence’s senior freight transportation and logistics analyst. “We don’t expect 2019’s peak will be particularly strong,” he said. “lt won’t overwhelm or underwhelm, it might just whelm.”
Shippers already have their eyes on 2020, however, and small changes in truck pricing, capacity, and demand now may signal bigger shifts next year.
Although truckload spot rates are more than 10 percent lower than they were a year ago, they are higher than in May, according to a Journal of Commerce analysis of 115 competitive truckload and intermodal lanes.
“Truckload rates are tied more closely to capacity than volume, and last month a number of events limited truck availability in key markets for shippers and freight brokers,” said Peggy Dorf, market analyst with DAT Solutions.
US shippers planning next year’s budgets say they are taking an early look at transportation contracts, using their present pricing leverage to guard against a potential swing of the pendulum sometime next year. An uptick in pricing may not mean a turn in the truck market is around the next curve, but it may signal one is slowly — very slowly — approaching, explains JOC.
With 2020 less than three months away, trucking appears to be heading toward a more balanced market than seen in 2018 or most of 2019.
The high level of uncertainty in the US economic outlook is forcing shippers that rely on trucks to become more nimble when it comes to supply chain planning and more flexible when it comes to budgets. More than ever, they need to plan for a variety of different scenarios, from economic resurgence to recession and, perhaps most likely, slow-growth expansion.
Full JOC article here.