May 2024 Freight Market Update

05/16/2024 by Greg Massey

May 2024 Freight Market Update

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It seems much of the news clippings have been around freight rates and how they remain suppressed. One could jump to the conclusion that this is a result of freight volumes being down. On the contrary, freight volumes are elevated from what we saw in 2023. 

As you can see in Figure 1.1, volumes for the majority of 2024 are between six to eight percent higher compared to 2023. What is driving (or not driving) rates remains the capacity in the market. 

Figure 1.1

Capacity is showing a net decline, albeit slower than expected. Much of that reduction is being felt in the less-than-10 tractor-fleets, so while the number of for-hire carriers is declining, the impact to actual trucks to haul freight is a slow drip.

That capacity continues to hold tender rejection rates at extremely low levels, meaning few loads are hitting the spot market. As a result, spot rates remain almost $0.70 per mile less than contracted rates. There has been some closing of the gap over the past year, as shown in Figure 1.2, but look for the gap to remain relatively consistent for the remainder of the year.

Figure 1.2

The Aftermath of The Francis Scott Key Bridge Collapse

It has been about six weeks since the bridge collapse in Baltimore. Removal efforts continue and certainly, a return to normal traffic flow is years away.  

In positive news, looking at the *headhaul index for that market (Figure 1.3), aside from the drop around the time of the collapse, things appear to be back to normal from a balance standpoint. Certainly, there are more out-of-route miles and freight that may be entering at nearby ports, but for the most part, outbound and inbound freight volumes appear to be back to normal for the Baltimore market.

*headhaul measures the variance in outbound versus inbound freight

Figure 1.3

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