July 2023 Freight Market Update

07/19/2023 by Greg Massey

July 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.

Stagnant Freight volumes Continue to Push Carrier Compliance

2023 continues to see freight volumes showing little fluctuation. With freight volumes dipping more than 30 percent lower than the industry experienced over the past year, and little attrition at this point with carrier capacity, shippers are seeing freight tenders gobbled up almost exclusively as soon as they are offered.  

While there was a slight increase during the July 4th holiday week, primarily due to drivers taking extended time off the road, rejection rates have returned to their normal place of three percent on the van and reefer side (Figure 1.1).  Flatbeds continue to see rejection rates almost three times what vans and reefers are experiencing, but the trend has been slightly downward over the past two months.  

With no major signs of a rebound in volume, carriers will continue to strive for 100 percent compliance with freight tendered to them, and push for impeccable service to show why they need to continue to be a mainstay for shippers.

Figure 1.1

Start Preparing for a Balanced Market

There seems to be a tightening of the gap between contract and spot rates (Figure 2.1).  This was helped a bit by spot rates seeing an increase at the start of July, but contracted rates being rebid over the last three months have been the primary driver. 

In a normal market, the spread between contract and spot rates is around $0.15 – $.20 per mile. Currently, contract rates are $0.65 per higher per mile.  

As shippers expanded their carrier network in 2021 and 2022, look for a trimming over the next six months as shippers look to honor their volume commitments to contracted partners but provide themselves an opportunity to realize savings with capacity in the spot market.  

We do expect the supply and demand cycle to balance as we head into 2024, so shippers need to ensure they are not creating hurt feelings with carriers that find themselves on the outside looking in. Remember, this industry is a three-legged stool, and everyone benefits when things are in balance.

Figure 2.1

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