OOIDA Foundation report: Expect market to remain soft

November 27, 2023

SJ Munoz


Signs of an upward turn don’t exist, according to the OOIDA Foundation’s October market update.

In fact, the Foundation says to expect current trends to continue until at least 2024.

Flat rates, high operating costs, soft volume and demand as well as loose capacity all factor into the continued negative market outlook.

Below is a breakdown by specific market.

Van market

The load-to-truck ratio fell 24% month-over-month and is now 42% below the five-year trend.

However, carriers in the Upper Atlantic region saw an increase to this ratio.

Spot rates and contract rates both decreased, which is not typical at this time in the freight season.

Inventory-to-sales ratios were also down, but monthly sales increased, providing a positive indicator for future truck demand.

Household appliance wholesalers also continued to move in the right direction.

Flatbed market

Load posts remained significantly lower than in 2019, while equipment posts remained high.

Only four of 16 regions experienced an increase in load-to-truck ratios.

The spread between contract and spot rates increased to a point 10% better than last year.

Construction spending remained elevated, but flatbed demand continued to drop. This was likely due to inflation.

Housing starts moved up again in October but were still down quarter-over-quarter.

The trend of retailers right-sizing their inventories needs to continue for several months before it impacts freight demand.

Reefer market

October saw a large dip in demand. However, produce volumes looked to pick up in the fall season.

The load-to-truck ratio fell in six of 16 regions and was 42% lower than last year.

The spread between spot and contract rates was 12% better than a year ago.

According to the U.S. Department of Agriculture, carriers in the Mexico-Arizona region experienced the greatest increase in pay-per-mile. The California, Mexico-Texas and New York regions experienced decreases over 10 cents per mile. The Pacific Northwest saw the largest increase in volumes.

Truck capacity was flat, ending three consecutive months of losses.

Trucking market

The Transportation Service Index says freight volumes were flat, while the Cass Shipment Index expects the freight market will continue to bounce along the bottom for the near term.

Trucking employment numbers overall were down, largely due to Yellow Corp. closing its doors.

New sales eclipsed used sales for the third consecutive month, a negative sign for capacity.

Transportation prices were contracting at their slowest rate since September 2022.

Fuel prices ended two months of increases and were 13.5% lower year-over-year.

Year-over-year comparisons of used truck prices have been negative for 11 consecutive months, a bad indicator for the overall freight market.

Wages and salaries continued to grow, but real disposable income moved downward.

New orders from manufacturers eclipsed shipments again in August for the seventh straight month.

According to the Institute for Supply Management, the U.S. manufacturing sector shrank again, and at a faster pace in October.

Though imports were down year-over-year, they were on par with pre-pandemic levels.

Carloads and intermodal increased but were both below the five-year trend.

The full OOIDA Foundation market update for October is available here. LL

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