August brought mostly positive news for the for-hire trucking sector, with seasonally adjusted freight volumes trending up and spot market rates showing year-over-year growth across major equipment types. However, contract rates continued to fall, and industry capacity remained high, adding pressure to rates. Here’s a detailed look at how the trucking industry fared in August.
Freight Volumes Increase, Rates Decline
Freight volumes in August saw a notable uptick, particularly in the contract freight sector. The American Trucking Associations (ATA) reported a 1.8% increase in its seasonally adjusted Truck Tonnage Index, which rose to 115.8, the highest level since February 2023. This upward trend suggests a recovery in freight demand after several volatile months, marked by significant spikes in January and February. According to Bob Costello, ATA’s chief economist, “August tonnage levels rose to the highest level since February 2023,” indicating that freight levels are rebounding.
Similarly, the Bureau of Transportation Statistics (BTS) reported a modest increase in its Truck Tonnage Index, which rose by 0.1 points to 113.9. Meanwhile, ACT Research’s For-Hire Trucking Index showed a more substantial improvement, with a 4.8-point rise in seasonally adjusted volumes. ACT attributed this increase to growing demand for goods and inventory pre-positioning, spurred by concerns over potential port strikes on the East Coast.
However, while freight volumes improved, contract rates fell across the board. According to DAT Freight & Analytics, average contract rates dropped for all major equipment types. Van contract rates averaged $2.40 per mile, down 3 cents from July, while reefer rates fell to $2.74, a 7-cent decrease. Flatbed rates also declined by 3 cents, averaging $3.08 per mile. Since August 2022, monthly average contract rates have remained lower on a year-over-year basis, reflecting continued pressure on pricing in the contract freight sector.
Spot Market Performance: Volumes and Rates Climb
August also saw encouraging performance in the spot market, where both freight volumes and rates rose on a year-over-year basis. According to DAT’s Truckload Volume Index, dry van and refrigerated freight volumes posted significant gains. The dry van volume index climbed 6.3% year-over-year, while refrigerated volumes soared 17.6%, indicating strong demand in these segments. Flatbed volumes, however, experienced a slight year-over-year decline of 0.7%.
Spot market rates followed a similar pattern. While month-over-month rates fell slightly, year-over-year rates showed improvements for all equipment types. Average dry van spot rates were $1.60 per mile, down 3 cents from July but up 3 cents compared to August 2023. Reefer spot rates averaged $1.96, a 2-cent drop from July, but still up 1 cent year-over-year. Flatbed rates averaged $1.92 per mile, down 5 cents month-over-month but 2 cents higher than the previous year.
These year-over-year gains in spot market rates mark a shift after a prolonged period of declines, offering a glimmer of hope for trucking companies that rely heavily on the spot market.
Unemployment Steady, Driver Availability Rises
In the labor market, transportation unemployment remained stable in August at 4.8%, according to the Bureau of Transportation Statistics. This marked a 0.9 percentage point drop from July, though it remained slightly higher than the overall U.S. unemployment rate, which stood at 4.4%. Transportation unemployment has generally tracked above the national average since the COVID-19 pandemic.
Meanwhile, ACT Research’s Driver Availability Index, which measures the ease of finding qualified truck drivers, rose to 55.4 in August, up from 53.1 in July. This index has consistently remained above 50 since 2022, signaling that driver availability is not currently a limiting factor in the trucking industry. This surplus of available drivers, combined with high industry capacity, continues to weigh on rates, although ACT Research predicts gradual improvements in freight rates over the coming months.
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