February 2023 Freight Market Update

Stay up to date on the latest information on conditions impacting the freight market, curated by Trinity Logistics through our Freightwaves Sonar subscription.

SOMEWHAT HO-HUM

The current landscape for over-the-road freight looks like what it was a month ago. Freight volumes are lower year-over-year (YoY) but seem to have found a floor.  

If anything, the flat lining of volume (Figure 1.1) we are seeing is eerily like what we saw in the early part of 2020. And that is not just relative to freight volumes. 

Back in ’20, carriers were snatching up tenders as soon as they were offered, with rejection levels hovering in the five percent range. Right now, we are just below that five percent mark. It’s anticipated that freight flows will follow their seasonal patterns, albeit at reduced volumes compared to what we saw in 2021 and most of 2022. Spot rates continue to trend lower than contract rates, although that gap continues to shrink. It’s also anticipated that contract rates will continue to slide while spot rates should be pretty near their floor.  

DECLINING PORT ACTIVITY 

Imports will continue to weaken over the next several months. While some ports have seen slight increases in YoY volume, that increase is not indicative of an overall volume surge. It’s due to the shifting of where the freight is entering the U.S.  

So, while ports like Houston (up 5.2 percent) and Baltimore (up four percent) are robust with above-average activity, major entry points like Los Angeles (down 30 percent), Oakland (down 58 percent) and Seattle (down 41 percent) are feeling the lack of volume. An opportunity should be seen with export activity (Figure 1.2).  While the U.S. dollar losing value is not good for imports, it has the opposite effect on export activity.

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