Shipping and Logistics

Trucking Industry Sees Lower Shipping Volumes

June 13, 2019

Truckload volumes were a disappointment in May, said DAT Solutions in their monthly report. Truckload volumes for van trailers, which haul about 70 percent of all truckload freight, declined 12 percent from April and were down 10 percent year-over year.

Volume for flatbed trucks that haul steel, heavy machinery and construction material declined 9.3 percent in May and was 3.1 percent lower than a year ago. The flatbed load-to-truck ratio was 13 loads per truck at the end of May, compared to 90 loads per truck in May 2018.

“Simply put, May was a disappointment in terms of load counts,” said DAT Senior Industry Analyst Mark Montague. “We’re accustomed to seeing higher volumes of retail goods, fresh produce, construction materials and other seasonal spot truckload freight moving through supply chains at this time of year.”

Truck demand faltered in May as extreme weather and flooding disrupted supply chains across the Midwest and trade wars diminished imports from China. Shipments of agricultural goods were delayed as floods and tornados ruined crops.

“After a lackluster May, June is shaping up to be a pivotal month for trucking,” said Montague. “We will know soon whether the volumes we expected in May were simply delayed. If so, the pent-up demand could boost seasonal volumes at the close of Q2.”

Spot freight rates were well below 2018 levels, said DAT. The national average spot rate for vans was unchanged from April, but was 35 cents below the average from a year ago. Flatbed rates averaged $2.27 per mile in May, a 45 cent drop year-over-year and 5 cents lower than April.

“Last year was a year of extraordinary change,” said financial analyst Donald Broughton, Principal and Managing Founder of Broughton Capital, in a June 10 blog for DAT. The transportation industry prospered in an environment of robust demand, higher pricing and tight capacity resulting from new truck regulations and corporate tax cuts.

“Since the beginning of 2019, our economic outlook has shifted based on changing freight flows,” said Broughton. “First, it was, ‘We don’t expect growth to be as strong as 2018, but see no reason to predict a recession.’ Then it was, ‘The global economy appears on the verge of entering a recession, but that hasn’t dampened growth in the U.S.’ Now it’s, ‘In almost every sector, in every mode of transportation, in every part of the globe, freight flows are signaling economic contraction.’”

FreightWaves noted that “seasonal demand remains muted and declines in pricing reflect a capacity overhang.” They added, “May was representative of an imbalance in the spot market.”

Investor conferences by trucking and logistics companies last week revealed broad concern about volume weakness in April and May.

“June is a big month in the second quarter historically…and if we don’t see it here in the month of June, you really have to question what we are going to see in July and August,” said Schneider National CEO Mark Rourke.