Economic Trucking Trends: Flatdeckers weigh on spot market rates, private fleets adding trucks

It appears the summer doldrums are in full effect. The spot market remains sluggish, with flatdeckers feeling the most pain in recent weeks.

Trailer orders ticked upward slightly in July, and the Class 8 backlog continues to be chewed through. There’s also evidence that while for-hire fleets are trimming their truck counts in this tough market, private fleets are adding equipment and pulling freight back into their own networks.

Summer slowdown on Canada’s spot market

Loadlink Technologies reported an expected seasonal decline in both load and truck postings in July.

Both freight and truck volumes declined about 20% from June levels, Loadlink reports, aligning with seasonal expectations. However, cross-border loads dropped to 58% of total postings, down from 65% in June. This shift resulted from a decrease of 42% in inbound loads coming to Canada from the U.S.

This, too, reflects previous seasonal trends, Loadlink reports. There were 4.85 trucks posted for every load in July, up from 4.01 in June, marking a 21% increase in the truck-to-load ratio. That ratio is up 38% year over year.

Trailer orders steady, Class 8 backlog declines

Trailer orders ticked upward in July, according to preliminary data from ACT Research, but remained lower than long-term comparisons at 10,000 units (15,700 seasonally adjusted).

“Preliminary net orders, at 15,700 seasonally adjusted, rose more than 95% sequentially and were the highest seasonally adjusted level since March,” said Jennifer McNealy, director commercial vehicle market research and publications at ACT Research. “With still high backlogs and 2024 orderboards only minimally open, it is still too soon for robust expectations.”

Cancellations moderated in July, but remained higher than desired, McNealy added.

“Backlogs remain healthy, if falling below year-ago levels for the first time this year in June. Demand may be softening, but it’s far from falling off a cliff,” she concluded.

As far as Class 8 trucks go, the backlog is being whittled down. In July North American Class 8 order backlogs fell by 11,632 units to 163,576, ACT reported.

“With over 90% of the current backlog scheduled for build in 2023, Class 8 backlog is likely to continue to decline until 2024 orderboards are opened,” said Kenny Vieth, president and senior analyst.

For-hire fleets contract as private fleets expand

Sticking with analysis from ACT Research, the industry forecaster says the U.S. freight market continues to rebalance. The process is slowed by fleets reluctant to let drivers go, and additional capacity being added by private fleets that are pulling back more freight from the for-hire segment.

“Although seasonality remains loose and demand soft, spot market dynamics have begun to shift since the end of operations at Yellow on July 31. While this is a game-changer for LTL rates, so far, the truckload market is still loose enough for rates to be largely unaffected. We see the impact growing over time, along seasonal patterns,” said Tim Denoyer, ACT Research’s vice-president and senior analyst.

ACT reports for-hire fleets in the U.S. collectively trimmed tractor counts by 3% in the first half of the year, but the overall Class 8 tractor fleet continues to grow as private fleets expand.

“Class 8 orders will be very interesting over the next several months and, in our view, pivotal to setting the market tone for 2024,” Denoyer concluded.

Flatdeck segment weighs on U.S spot market rates

And how about those poor souls toiling in the U.S. spot market? Things aren’t getting a lot better, according to Truckstop and FTR Transportation Intelligence. For the week ended Aug. 11, spot rates softened, but primarily due to the flatbed segment.

Total broker-posted rates in the Truckstop system declined, right after seeing their first increase in 10 weeks during the week prior.

Spot rates for dry vans were unchanged on the week, while reefer rates dropped by just over a penny.