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Dive Brief:
- Charterers continued to make additional gains in bargaining power through the end of 2023, with conventional dry truck rates – including the fuel surcharge – falling to their lowest level in nearly three years, per DAT Freight Data & Analytics.
- The last time the dry truckload average fell below $2.50 was in early 2021, but prices have generally declined since peaking in May and June 2022. Last month, the price reached $2.49.
- “Entering 2024, shippers are in a strong position as they negotiate contract rates and carriers in the spot market have some optimism that the market will turn,” DAT Head of Analytics Ken Adamo said in a press release.
Dive Insight:
While contract and spot prices have continued to decline, the spread between the two is still significant, Adamo noted.
“Charters have been able to negotiate lower contract rates in part because there is a lot of capacity in the market relative to cargo size and because spot prices have been so low,” DAT said in a statement to Trucking Dive.
Despite the decline in dry truck contract prices, there were exceptions, noted ACT vice president and senior research analyst Tim Denoyer in a monthly Cass report.
“With spot rates holding steady in recent months, bearish pressure on the larger bond market is easing,” Denoyer wrote.
The spread between spot dry truck rates and contracts narrowed 7 cents to a spread of 39 cents in December 2023, more in line with 2019 levels, according to DAT data.
“Fare demand is below trend but beginning to recover as post-pandemic effects fade, both real disposable income and retail sales pick up,” ACT Research said. was noted on Thursdayadding that “disruptions to ocean shipping are likely to catalyze the end of 18 months interest rate