Welcome to the Freight Market Cheat Sheet.
In this short guide, supply chain professionals (like you) can get a quick update on what's happening in North American freight markets this month.
Get insights driven by market experts and proprietary network data.
(If you'd prefer, you can also download this as a PDF.)
As we find ourselves gearing up for retail peak season, market conditions (plenty of carrier capacity relative to shipper demand) haven't changed much over the last several months.
While there are some signs that we are past the bottom of the truckload market cycle and heading towards inflation in 2024, rate growth has been relatively flat.
Another factor to keep an eye on: fuel costs.
After increasing in August and September, national diesel prices finally decreased, dropping -1.2% in October.
Though diesel is still well below the peak of mid-2022, the price at the pump is still nearly 20% higher compared to the spring and summer.
This has placed even more pressure on a financially strapped supply base, especially since all-in truckload rates have not risen at the same pace.
Let's recap October, and prepare for what November has in store.
Supply Chain Fun Fact of the Month
It's Q4, and that means planning season. There's no time like the present to review your supply chain KPIs and rate your carrier network.
Two of the most important KPIs for any shipper? On-time pickups and deliveries.
Though both are important, when choosing between the two, shippers were nearly 5x as likely to think on-time delivery was most important, and carriers were nearly 10x as likely.
Compared to September, overall rates were down slightly in October (-1.4% across all equipment types). However, later in the month and into November, we started to see a bit of an uptick as peak season approaches.
Heading into November, we saw mild increases in network volumes, driven by increases in non-contract spot and backup freight.
We also saw rates start to trend upwards: All but one region ( the Southwest) saw rates increase W/W in early November, with the Mountain West and Pacific Northwest seeing the biggest spike.
An interesting call-out: in the first week of November, California rates have reached parity with 2022 levels, and most other regions are also within shouting distance of 2022 as well.
Even though the climb is slow, we are inching back towards Y/Y equilibrium.
Note on the data: all truckload rate figures are derived from Coyote's proprietary transactional data. With thousands of daily shipments, it is one of the largest centralized freight marketplaces in North America.
Want the updated truckload market forecast?
LTL Trends: November 2023
Similar to the full truckload market, demand for LTL services remains relatively muted across the industry. As a result, LTL carriers have ample capacity.
Though they are willing to collaborate on pricing if it's a good operational fit for their network, we're seeing most maintain discipline, and not grabbing new business simply to grow volume share.
Furthermore, general sentiment suggests that carriers learned some hard lessons from previous demand downswings, and are being cautious about reducing driver staffing.
Estes System Outage
Estes systems have returned to normal after their outage last month.
While there may be some lingering impacts to documents and billing, the overall network is strong and isn’t expected to show any long-term degradation.
Yellow Freight Closure
The impact of Yellow’s closure has mostly subsided with their heavy volumes of transactional freight flowing to carriers in the national and regional space.
That said, there could be a second wave impact as former Yellow customers transition from temporary stop-gap plans to revisiting their network structure as a whole heading into 2024.
Prepping for the Holidays
Be mindful of holiday closures and weather delays as we enter the winter months. Remember that a one-day facility closure doesn’t necessarily mean a one-day delay in LTL transits.
LTL carriers must work through backlogged pickups, deliveries and linehaul operations across large and complex networks, and it can take relatively longer to untangle compared to full truckload.
Though capacity remained stable over the last month, we did see a modest intermodal peak season from late September through October.
An Intermodal Peak Season?
October was a surprisingly strong month for U.S. intermodal and carload volumes. Per the Association of American Railroads, it was, “The most volume for any month since June 2021, a span of 28 months."
This aligned with higher U.S. import volumes received in September and October, much of which moved inland via intermodal.
This volume spike was strong enough to be considered a modest Peak Season (not seen since 2021), but early November data is already showing signs of subsiding.
Intermodal Pricing Holding Steady
As we approach the 2024 RFP season, intermodal contract rates are generally expected to remain flattish year-over-year.
We likely won’t see increases to annual rate offers until some time after the truckload market rebounds, likely later in 2024.
In other news, the CSX and Canadian Pacific/Kansas City Southern railroads are seeking Surface Board of Transportation approval to establish a new interchange point in Alabama that would link rail traffic between Mexico, Texas, and the U.S. Southeast.
Here are a few things to stay up-to-date with Coyote Logistics.
- See insights from the Coyote Roadshow, hosted at our global headquarters in Chicago.
- Coyote joined the TriumphPay network to make carrier payments more efficient.
- Coyote's Kait Parker won a Woman in Supply Chain award.