OOIDA Foundation releases January market update

February 28, 2024

Land Line Staff


Much remained the same in the OOIDA Foundation’s January market update.

Rates are flat, capacity is loose, operating costs are high and volume/demand is soft, according to the report.

Consequently, the overall outlook is still negative.

Spot Market Cycle Indicator

Spot Market Cycle Indicator
Source: DAT Trendlines | https://www.dat.com/industry-trends/trendlines

Van Market

The load-to-truck ratio increased in January, but only seasonally, as demand typically increases this time of year.

Carriers in the Upper Atlantic, Upper Midwest and Lower Midwest regions saw the most favorable ratios.

Spot rates increased but remained below where they were in January 2023. Contract rates were down.

Inventory-to-sales ratios decreased slightly, while monthly sales remained mostly flat in November. Demand has not increased, which is why the current freight downcycle is continuing.

Flatbed market

Load posts jumped but are 48% below 2019 levels. The load-to-truck ratio increased month-over-month. The Southeast, Lower Atlantic and Upper Atlantic regions saw the most favorable ratios.

DAT’s extended forecast predicts that flatbed spot rates excluding fuel will jump $0.19 in February and then steadily increase until August 2024.

Construction spending is elevated, likely due to inflation, as flatbed demand continues to fall.

The Fed has indicated rate cuts in 2024, which could spur more housing activity and thereby freight.

Reefer market

Demand moved upward. However, the load-to-truck ratio has declined year-over-year for 23 consecutive months.

According to USDA, carriers in the Mexico-Texas region experienced the greatest increase in pay per mile month-over-month.

Volumes fell below the seasonal trend with decreases reported in the California, Mexico-New Mexico and Mid-Atlantic regions.

Reefer truck capacity loosened even despite an increase in rates due to the end of year holidays. Capacity either remained flat or loosened for every region in the country.

Trucking market

The Cass Shipment Index believes that the current downcycle is nearing completion due to rising import and intermodal trends as well as a change in the truckload and less-than-truckload modal mix.

Truck employment numbers overall increased for the third straight month.

Class 8 new sales decreased, while new order increased. The industry has experienced overcapacity since the fourth quarter of 2022.

Class 8 orders and sales
Source: ACT Research | https://www.actresearch.net/

Used sales continued a downward trend and have been negative year-over-year for 14 consecutive months.

Fuel prices declined for the third consecutive month and are 15% lower year-over-year. The average price has been down year-over-year for 11 straight months but is still higher than the five-year trend.

Diesel fuel prices

Freight market

Wages and salaries, as well as real disposable income, continued to grow year-over-year as wages outpaced inflation again in December.

Retail trade fell month-over-month in January. Manufacturing activity excluding pharmaceuticals and computer and electronics decreased month-over-month in January and fell year-over-year.

New manufacturing orders eclipsed shipments for the 10th consecutive month. Demand moderated, output/consumption expanded slightly and inputs continued to accommodate future demand growth.

Carloads continued to remain flat, while intermodal continued to move up as more freight moved back to the West Coast and import volumes continued to perform well. LL

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