As expected, February’s truckload freight volumes dropped as they have in prior years as they return to seasonal norms. However, this year’s 12 percent drop in volume was sharper than usual. This can be attributed to two factors:
- Many parts of the United States experienced extreme winter weather this February that slowed volume.
- January’s spot rate numbers were unexpectedly strong, which is likely because of accelerated freight movements from shippers because Chinese New Year came earlier this year.
These reasons might also explain the decrease in freight rates and volumes for van and reefer shipments throughout February. Spot market rates show an average of 7 cents per mile lost. Flatbed rates fared better with little change since last month. While volumes slid lower, but contract carriers are expected to collect higher rates during 2019 because any renegotiated agreements with shippers from last year have not yet taken effect in February. Included in those rates are higher fuel surcharges that are tied to diesel retail prices.
It is not all doom and gloom because this year’s contract carriers’ volumes were 3 percent higher when compared to February 2018. This could be a sign that a rebound could be on its way during the second quarter for pricing that is expected to peak in June.
Analyzing spot rates at the end of February:
- Van spot rates dropped by 3.3 percent to $1.89 from $1.95 in January
- Flatbed spot rates dropped by 1.1 percent to $2.33 from $2.36 in January
- Reefer spot rates dropped by 4.2 percent to $2.21 from $2.31 in January
Fuel costs saw a 0.6 percent rise since January. However, fuel costs remain 1.6 percent less than February 2018.
Looking forward to March, at the end of the second week of March, the spot market is seeing noticeable improvement. Spot market loads are up 3.5 percent and capacity has also seen a gain of 3.4 percent. Spot van, flatbed and reefer rates are seeing slight gains of 1.4 percent, 1.6 percent and 1.3 percent respectively. Fuel costs have remained relatively stable with a negligible increase of 0.1 percent to $3.08 per gallon.
