OOIDA Foundation’s market outlook mostly unchanged

As was the case in March and April, the OOIDA Foundation says its freight market outlook is negative.

The 48-page report revealed that volume, demand and rates are all flat, while capacity is loose and operating costs are high.

Van market

Load-to-truck ratio increased in May as demand typically increases through July 4. Despite the 32% increase month over month, the ratio is still 43% lower than last year.

Load posts are almost identical to 2016 levels, while equipment posts are still high, according to the OOIDA Foundation report.

Rates are underperforming compared to their typical seasonal trend. Spot rates stayed flat and contract rates decreased. The spread between the rates is not 54 cents per mile.

DAT predicts spot rates excluding fuel will increase around the Fourth of July before moving downward at the end of the month.

Inventory-to-sales ratios decreased, but monthly sales went up. Inventories still need to decline further before demand really picks back up.

Flatbed market

Load posts have dropped 35% since the start of April, and are 42% lower than 2019, according to the OOIDA Foundation report.

Equipment posts are at their highest level in seven years.

Flatbed has been the only equipment type to experience positive movement, but it’s starting to decline as well.

Load-to-truck ratio is 66% below the five-year trend.

Spot rates decreased, but contract rates increased ending five straight months of decline.

Total construction spending increased. However, spending on highways and streets decreased month-over-month, similar to last month.

Construction spending has helped keep flatbed afloat.

Housing starts saw a significant increase, but it’s not clear if this trend will hold firm going forward.

Building, materials, garden equipment and supplies, dealers sales and inventories moved back in the right direction as retailers continue to deplete their inventories.

Reefer market

As produce volumes begin to increase, the market has reversed its downward trend.

Load-to-truck is up 34% month-over-month, but 52% lower than last year, the OOIDA Foundation outlook says.

Refrigerated trailer equipment remains elevated.

Spot rates ended four straight months of decline, while contract rates dropped more than 5 cents per mile.

The spread between spot and contract is flat compared to a year ago.

Fruit and vegetable reefer rates are 28% below their high in January 2022.

Volumes shot up in May, but overall are down because of a slow start to the produce season.

Truck capacity is still loose compared to the last couple of years.

Freight market

Wages and salaries continue to grow. This has helped keep disposable income and sales elevated.

People are still purchasing goods, but at a slower pace and in different ways.

Durable and non-durable goods increased in April and spending is still elevated overall.

New orders total manufacturing ended two months of decline. However, manufacturing is slowing down.

Imports and exports both increased.

Jason Miller, a supply chain professor at Michigan State University, said the pullback on imports is being heavily driven by the slowdown of single-family housing starts.

Ports have overcome their congestion issues.

Intermodal containers are starting to level out as are rail carloads.

The OOIDA Foundation expects more freight will continue to shift to truck causing further slides in both carloads and intermodal.

Read the complete OOIDA Foundation market update here. LL

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