Rates are showing some positive signs for carriers in 2024 with market dynamics appearing to fundamentally change, analysts recently said in reports.
A DAT Freight & Analytics chart — inspired by Coyote Logistics’ former Chief Strategy Officer Chris Pickett’s Coyote Curve — showed that dry van spot rates have continued to grow year over year since July.
“With DAT spot rates net fuel tracking 7% higher than a year ago in Q4, contract rates are rising modestly but consistently across DAT data, Cass data, and fleets’ financial reports for the first time in three years,” ACT Research VP and Senior Analyst Tim Denoyer said in a monthly report Friday.
The DAT chart captures freight cycles using monthly data — though it’s not the complete story — and helps show how the last cycle ended and a new one began about three or three-and-a-half months ago, DAT Chief of Analytics Ken Adamo said on a Nov. 8 episode of Fleeting Conversations.
Spot rates holding gains
Contract rates lag about three or four months behind spot rates, he said.
“October continued the pattern of year-over-year gains in spot truckload rates and volumes, and approaching parity for contract rates,” Adamo also said in a monthly report on Nov. 19.
Shippers are still benefiting from a discount in the spot market of 8.7% below contract rates, DAT Group Product Manager Chad Kennedy said Nov. 19 on a weekly market update. Another early signal of tightening in the market, the new rate differential involving replacement contract rates, has hovered above and below 0%, he added.
Despite the favorable indicators, carriers still posted dramatic drops in operating income for Q3. Jason Miller, interim chair of the department of supply chain management at Michigan State University, noted on a Nov. 21 LinkedIn post that dry van TL still needs a “significant infusion of freight to get out of the current ‘limbo’ conditions where we have seen one cycle end but have yet to see another cycle begin.”
