OOIDA Foundation Market Update: volume, stable demand

The OOIDA Foundation has released its most recent market update.

Overall, the OOIDA Foundation freight market shows that operating costs are high, while volume and demand are stable. Also, according to the Foundation’s update, rates are flattening out, capacity is easing, and future prospects are limited.

Below is a summary of each of the four additional key markets that the OOIDA Foundation examines each month.

from the market

The load-to-truck ratio fell 7.8% month-over-month to 3.54 in August. This is the third consecutive month of decline. However, the decrease in the load-to-truck ratio is more due to an increase in capacity than a decrease in volumes, the Foundation’s report says.

As capacity increases, shippers will continue to take over trading rates, putting downward pressure on rates. The question is, will rates follow their normal pattern and rise during the holiday season or will they continue to flatten?

Although the consumer price index is significantly high due to inflation (8.5%), people continue to buy goods.

E-commerce business accounts for approximately 18.7% of total retail sales and increased 2.7% quarter-over-quarter to $ 257 billion. This is 44% higher than the five-year trend.

Retail sales aren’t expanding like they used to, but they’re not exactly declining either, the OOIDA Foundation reported.

Flat bed market

As with the van market, the decrease in load-to-truck ratios is more due to an increase in capacity than a decrease in volumes, reports the OOIDA Foundation. The load-to-flatbed truck ratio fell 35.2% month-over-month to 14.1 in August, the fifth consecutive month of decline. The ratio is 65% lower than the five-year trend, which will put further downward pressure on rates.

Spot rates fell for the second consecutive month, while contract rates fell 3.4% in August. However, those rates are still 18% above the five-year trend, and the contractual rates are 31% higher. Rates are likely to continue to decline as the winter months are generally a slower season for transporting flat-bed freight.

Market forces for the flat sheet sector appear strong overall as new orders in the manufacturing sector continue to remain high. Total production is 15.3% above the five-year trend.

The beginnings of housing are rapidly dwindling, signaling a slowdown in the housing market. New beginnings have now dropped 20% from this year’s high in April. This is still 3.8% above the five-year average. Homes under construction are also above the five-year trend.

Flatbed volumes and tariffs are expected to remain high as consumers and businesses continue to purchase building materials, garden equipment and supplies from retailers.

refrigerated market

Like vans and flatbeds, the refrigerator market also saw a decrease in the load-to-truck ratio on a monthly basis, albeit at a lower rate, down 2.2% to 7.08 loads per truck in August.

Unlike vans and flatbeds, the refrigerator market is moving more sideways.

Both spot and contract rates fell from month to month, marking three consecutive months of decline for the spot and two months for the contract.

Refrigerated truck volumes and capacity have eased, putting downward pressure on tariffs. Retail sales of food and drink services reflect DAT’s Trendlines.

Global freight market

Employment numbers remain strong, job openings continue to rise, and resignations remain high, reports the OOIDA Foundation.

Unemployment is 30% lower than the five-year trend, and truck employment has increased to 1,595 million people, 6% higher than the five-year trend.

After measuring inflation, durable goods rose for the third consecutive month and non-durable goods decreased for three consecutive months.

People are still buying goods despite the significantly high consumer price index.

Expeditor services, hot-shots, and overall lower truck load continue to experience high rates.

Manufacturing data suggests activity is still strong even though total output could peak.

Exports and imports have declined from month to month, but are more in line with seasonal and pre-pandemic trends.

Container ships are still piling up even as ports across the country strive to become more efficient.

Finally, the intermodal industry continues to struggle with service problems. This could be catastrophic in the unlikely event of a railroad strike.

The Foundation announced in July that it would begin providing a monthly market update to allow OOIDA members to get detailed information on what is happening in the market and have a clear picture of what to expect in the future.

The complete OOIDA Foundation market update can be viewed here. LL

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