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By Mark Montague, DAT Solutions
The number of van and refrigerated load posts on the spot truckload freight market have been flat recently—not dramatic but good signs for the economy, considering that February is a slow month for freight movements.
Unless you're a flatbed hauler.
The demand for trucks to move construction materials, machinery, and other flatbed loads has been off the charts lately. Flatbed load-to-truck ratios have been rising since November and hit an all-time peak as I write this in mid-March. The national average flatbed ratio was 88.5 during the week ending March 10, meaning there were 88.5 available flatbed loads for every truck. That figure was 29 in November.
Flatbed ratios are always higher than van or refrigerated load-to-truck ratios because there are so many different trailer types grouped in the "flatbed" category, and they can't all be substituted for each other.
But still, 88.5 is incredible.
Flatbed rates have tracked upward as well, although not at the same steep trajectory. The national average flatbed spot rate was $2.36 per mile in February, 1 cent lower than January but 40 cents higher year over year. It matched the average contract rate in February. Spot flatbed rates continued to rise sharply through mid-March.
What's driving the market?
One factor is imports. Rates out of port markets, including Houston, Jacksonville, and Savannah, have been trending up as more flatbed goods arrive from overseas.
Another is construction activity. Optimism among
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contractors, distributors, manufacturers, and equipment rental companies is at a 20-year high, according to a 2018 construction outlook report from Wells Fargo Equipment Finance. A similar report from the Associated General Contractors of America found that 75% of the construction companies surveyed plan to add to their payrolls this year.
With West Texas Intermediate crude oil prices settling into the high-$50 to low-$60 range, there are signs of accelerated drilling activity. Stable energy prices are good news for flatbed activity from Houston, the country's largest flatbed market.
Finally, consider the calendar. The end of March coincides with the end of the first quarter, the Easter weekend, and the start of the full penalty phase of the Electronic Logging Device mandate on April 1. It's a triple-witching event for freight.
Shippers will want to move all types of goods ahead of these key dates, and the additional demand will intensify the strain on van, reefer, and flatbed capacity. Expect load-to-truck ratios—and truckload freight rates—to stay solid.
Mark Montague is senior industry pricing analyst for DAT Solutions, which operates the DAT® network of load boards and RateView rate-analysis tool. He has applied his expertise to logistics, rates, and routing for more than 30 years. Mark is based in Portland, Ore. For information, visit www.dat.com.
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