Dive Brief:
- Shippers continued to make additional gains in bargaining power through the end of 2023, with dry van contract rates — including a fuel surcharge — dropping to their lowest level in nearly three years, per DAT Freight & Analytics data.
- The last time the dry van average fell below $2.50 was in early 2021, but rates have generally declined since peaking in May and June 2022. Last month, the rate reached $2.49.
- “Entering 2024, shippers are in a strong position as they negotiate contract rates, and carriers on the spot market have some optimism that the market will turn,” DAT Chief of Analytics Ken Adamo said in a news release.
Dive Insight:
While contract and spot prices continued to narrow, the spread between the two is still substantial, Adamo noted.
“Shippers have been able to negotiate lower contract rates in part because there’s a lot of capacity in the market relative to the amount of freight, and because spot rates have been so low,” DAT said in a statement to Trucking Dive.
Despite the decline in dry van contract rates, there have been exceptions, ACT VP and Research Senior Analyst Tim Denoyer noted in a monthly Cass report.
“With spot rates steady over the past several months, downward pressure on the larger contract market is lessening,” Denoyer wrote.
A spread between dry van spot and contract rates fell 7 cents to a 39-cent difference in December 2023, bringing it more in line with 2019 levels, per DAT data.
“Freight demand is below trend, but starting to recover, as post-pandemic effects fade, both real disposable incomes and retail sales are accelerating,” ACT Research noted Thursday, adding that “disruptions in ocean shipping are likely catalyzing the end of the 18-month destock.”
