Rates are crashing and fuel to the moon!

Boonville, MO
Never had a situation like this in this company

 

Here I was about ready to say where am I at there’s a lot more reefer loads than trucks. Evidently a lot of people are saying no to cheap rates. The available load count is unchanged from this morning and sitting around 250. Brokers are having to scramble this afternoon. Here’s a few of the morning rates and rates right now:

$1000 now $2000…568 loaded miles
$2000 now $2400…773 loaded miles
$3200 now $3500….1,118 loaded miles
$875 now $1250…212 loaded miles

Don’t get me wrong there’s plenty of cheap freight still out there but it’s a big game of chicken. It’s refreshing to see even if it’s just for a day.

 

In the last 2 weeks, I’ve done 1 load. The rains out here in the West Coast has put the infrastructure on hold. I run local so I’ve been at home. West Coast isn’t use to having so much rain and snow, been breaking records up and down the state.

 

I would like to believe that many carriers are thinking about the future and are ready to refuse cheap cargo today. This will make the market fair for everyone. As a company driver, I am ready to wait at least a month on the truck stop to contribute to the common cause. But not everyone will do the same. So, I would love to believe in general prudence.

 

Yep seeing the samething today in dry van freight. Had my number up on DAT last night and getting a few calls today. Of course I am not taking any of them.

 

Me N Tabby and Ol' lady Jane

We hitched a ride

Caught a fast movin train

 

As far as general rates out in the wild? Probably on par with 2016 right now as you noted. And yep, everything was much cheaper back then so it was a lot more doable. Cheaper fuel, cheaper labor, cheaper trucks, cheaper insurance, cheaper financing, etc.

The general rates right now are probably nearing or at the floor. Contract freight isn’t likely to slip much further down as newer and higher costs are already being baked in. You’ve got shippers hitting carriers with “we can move it cheaper on spot” for almost a year now. Some have caved to meet them, some have not and some have gone out of business when they can do neither. The “bloodbath” is still bathing, as it were.

However, since the Fed still wants to ratchet up rates, a few things are about to happen. Capacity is about to shrink. Large carrier and owner operators are not about to rush out to buy largely overpriced equipment at much higher finance rates than even a year ago. Not while demand is overshadowed by capacity. They’ll make do with what they have and bleed off unproductive capacity. Demand is at best going to remain level this year. Next year probably not much better but the longer that time runs on and the higher costs get to operate a trucking outfit, the more pressure that will have to push rates up. There isn’t going to be enough used trucks for “cheap” that people can abuse this go around versus say 2016 or 2019. At least not trucks that are worth buying in the first place.

Now if there are no large outside events that smack the economy like we had with COVID, it’ll be a slow, controlled rise in rates to meet costs. Any sudden jolt to the system that spikes demand like we saw in 2020-2022 and shippers will be back over the barrel. So much so I’d bet the government would step in.

At least that’s what I’m seeing. Cheap money has left the chat. And it is surely taking the rest of the cheap with it.

 

The fuel line is long because most truck are just putting 50 gallons or filling one tank so it hurts less

 

Riverside Transport Inc

Saw this advertisement and laughed really loud. 1.22 p/m plus fsc. Man who's doing these type of lease purchases. WTF???

 

Nice post.

In normal circumstance id say by 1 yr from now we’ll be trending back up but if the government throws us into recession then that could hit making less capacity still too much to balance out or shift to our advantage.

At this point as long as they left inflation to roar, no soft landing can be had I don’t think. But I agree rates are probably bottomed if not nearly bottomed out. Let’s hope so anyway since the spot market is pretty much horrible.