OOIDA releases September freight market update
October 26, 2022
•Land Line Staff
The OOIDA Foundation released its September market update, which showed freight volume and employment numbers remain strong, while spot rates continue to normalize.
Below is a summary of each of the additional four key markets the OOIDA Foundation examines each month.
Load-to-truck ratio is bottoming out, a good sign as far as rates are concerned, said OOIDA’s freight market update.
However, as capacity increases, shippers will continue to have the upper hand in negotiating rates and that will place downward pressure on rates.
The consumer price index (CPI) is significantly high due to inflation, but consumers are still purchasing goods. E-commerce continues to elevate freight volumes.
The decrease in flatbed load-to-truck ratios is more because of an increase in capacity than declining volumes.
Spot rates as well as contract rates declined for the third consecutive month.
Market forces also appear to be weakening as new manufacturing orders decline, and construction materials move sideways.
Housing starts saw a jump in August as did building materials, garden equipment and supplies dealers, which are also 23% above the five-year trend.
A decrease of 10.6% to 6.33 loads to every one truck was posted in September. This is 20% below the five-year trend and 69% lower than January.
In addition, DAT is reporting record numbers of equipment posts, similar to flatbed.
Spot rates dropped for the fourth consecutive month, but contract rates held steady.
Fruit and vegetable reefer rates are starting to level out, with rates following more of a seasonal pattern. Rates per mile increased month-over-month to $4.04 in September after three months of decline.
However, reefer volumes within the fruit and vegetable industry declined 9.6% month-over-month to 541,567 pounds in September.
Lastly, retail sales for food services and drinking places closely mirror DAT’s Trendlines contract reefer rates.
Overall freight market
Job openings continue to grow, weekly initial jobless claims remain low, and quits remain elevated.
Unemployment is 25.5% below the five-year trend, while the unemployment rate for transportation and material moving occupations is 26% below the five-year trend.
Truck employment increased to 1.596 million people, 6% above the five-year trend.
Inflation is high, but wages and salaries are 8.2% higher than the 2017-19 trendline. That has kept retail sales elevated.
Expeditor services, hot-shots and general LTL continue to see strong rates, though those rates may have peaked.
Total manufacturing was down again in August, after nine consecutive months of growth. Manufacturing data still suggests activity remains strong.
Overall and streets construction spending saw a decline.
Ocean and rail exports were down 1.7%, while imports were up by 2.9%, which is 15% above the three-year trend.
Containerships continue to bunch up even as ports around the country strive to become more efficient but at a smaller rate.
The full OOIDA Foundation market update can be viewed here. LL
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