OOIDA Foundation releases December Market Update

OOIDA Foundation releases December Market Update

The OOIDA Foundation’s newest Market Update indicated volumes are flat, demand is slowing, capability could be very free and charges are bottoming. In addition, working prices are elevated.

As a end result, the longer term outlook is restrained.

Here is OOIDA’s outlook by particular market.

Van market

The load-to-truck ratio elevated month over month however is 53% decrease than January, and 13% decrease than the five-year pattern. Time will inform if this progress is because of seasonal tendencies or if the market is beginning to stabilize, in line with the OOIDA Market Update.

Trucking capability usually tightens throughout the vacation season. This yr, there was a rise in masses posted that pushed spot charges up whereas contract charges decreased.

Van spot charges are 4% above the five-year pattern and contract charges are 24% greater. DAT expects charges to backside out and bounce again round mid-February.

Goods are nonetheless being bought regardless of inflation reviews. However, retail commerce decreased month-over-month. The shopper worth index elevated once more and is 7% greater than one yr in the past. It’s additionally 12.7% greater than the five-year pattern.

E-commerce, which represents practically 15% of retail gross sales, elevated to $265.9 billion. It is now 48% above the five-year pattern.

The solely retail gross sales to drop had been from the electronics and equipment shops class, which has dropped 15.5% since peaking in June 2021.

Flatbed market

After eight consecutive months of decline, the flatbed load-to-truck ratio elevated month-over-month. It stays 81% decrease than this time final yr.

Spot charges declined for the fifth consecutive month. Contract charges had been additionally down following an uncommon enhance final month. The unfold between contract and spot is 76 cents. DAT predicts charges received’t choose again up till mid-February as a result of low variety of housing begins in addition to a slowdown in manufacturing exercise final month.

Total building elevated, however spending on highways and streets decreased. This pattern is anticipated to proceed as traditional all through the colder months.

Housing begins declined for third consecutive month, and are 1% above the five-year common however down 16% year-over-year. Houses beneath building stayed flat however are up 14% year-over-year. Completed homes jumped by practically 11% month-over-month.

Advanced retail gross sales decreased on account of particular reductions supplied by retailers to deplete their inventories throughout the vacation purchasing season. Typical of the seasonal pattern, flatbed volumes will decline within the winter months.

Reefer market

The reefer market reversed course following 4 months of decreases in load-to-truck ratio. That ratio elevated by virtually 15% in December. DAT continues to report a file variety of tools posts at the same time as produce volumes have fallen on account of historic droughts and flooding in California.

Spot charges elevated in December however declined in January. Those charges are anticipated to say no once more in February on account of decrease volumes in California and Florida.

Despite a small acquire in December, fruit and vegetable reefer charges are 18% under their excessive in January. Rates are nonetheless 11.3% greater than the five-year pattern.

The starting of the yr marks one of many slowest seasons for reefers till early spring.

Volumes dropped after a slight enhance final month, whereas truck capability tightened barely as reefer truck availability rose.

Spot charges for meals companies and ingesting locations proceed to fall on account of an extra in capability. This signifies the rise could also be extra due to inflation than quantity.

Overall freight market

Employment numbers stay sturdy regardless of inflationary issues. Job openings are sturdy, unemployment is 29% under the five-year pattern and truck employment elevated to 1.6 million individuals.

Durable and nondurable items decreased after two straight months of will increase.

Inflation is excessive, however wages and salaries are 7.2% greater year-over-year and 17% greater than the 5-year pattern, which has helped to maintain retail gross sales elevated.

Rates for expeditor companies, hot-shots and common LTL are sturdy however have peaked. Rates within the LTL market ought to stay sturdy.

Manufacturing has decreased, however exercise remains to be sturdy.

While not a big driver of freight motion general, imports and exports each decreased. Ports proceed to be much less congested across the nation. Containerships awaiting berth have dropped 74% since January 2022.

The full OOIDA Foundation Market Update might be seen here. LL

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