We have our first week of data suggesting that the trucking market is returning to “normal”. The Market Demand Index (see graph below) saw a notable drop in week 41 after a very small decline in the prior week; however, market conditions are still significantly tighter than we saw last year (up 153% y/y). That means strong freight demand, reduced truck capacity, and elevated rates.
Supply & Demand
Most of the downward impact came from a reduction in available loads. Load activity dropped 14% versus the prior week, but were still up 81% versus last year. Trucking availability increased 7% versus the prior week but remains well below both last year and the 5 year average.
Rates began to ease 3 weeks ago but they will stay elevated for some time. A likely part of the reason for the earlier drop in rates was the reduction in emergency FEMA activity. Those loads require a significant premium and they started to fade out shortly after the storms passed. Now we are on to normal recovery activity – increased loads for inventories and rebuilding. You will notice that Dry Van loads have eased more significantly and Flatbed activity is remaining elevated – inventory rebuilding is mostly completed, but now we are on to rebuild activity that is driven by more building goods (i.e. flatbed moves).