Expect seasonal shifts to temporarily tighten truckload
U.S. spot market forecast
The C.H. Robinson 2024 dry van linehaul cost per mile forecast remains unchanged at -5% year over year (y/y), while the 2025 forecast also remains unchanged at +9% y/y.
On the West Coast, tightness seems to be easing after Thanksgiving. The dry van load to truck ratio decreased from over 8-to-1 to 5-to-1, while the temperature controlled load to truck ratio decreased from 15-to-1 to 4-to-1. The expectation is for capacity to continue to ease to finish the year, outside of holiday tightness surrounding Christmas and New Year’s Eve.
From a national perspective, seasonal trends are expected to play out to wrap up the year. As illustrated in the chart below, this includes a tightening of capacity before Christmas and in between Christmas and New Year’s. There are some days that show a decrease in the load-to-truck ratio, but this isn’t indicative of a softening in capacity, but rather a large decrease in load and truck postings that skew the ratio.
Given the large decrease in available trucks over the holidays, costs will likely remain elevated during this time. Rescheduling pickup days or providing ample lead time will help mitigate cost increases.
The 2024 refrigerated annual line haul cost per mile forecast remains unchanged from an annual y/y comparison at -4%, while the 2025 forecast is projected to grow +7% y/y.
Contract truckload environment
The contractual landscape remained relatively unchanged in 2024. Because the contract environment tends to follow the spot environment, monitoring the spot market over the next few months will be important. Keep the duration of contracts in mind, as longer-term commitments may see different pricing than shorter-term commitments due to the 2025 rate outlook.
The following insights are derived from C.H. Robinson Managed Solutions™, which serves a large portfolio of customers across diverse industries.
Route guide depth (RGD) is an indicator of how far a shipper needs to go into their backup strategies when awarded transportation providers reject a tender. As displayed in the following chart, the RGD has remained flat at a historically low level for approximately two years.
For long hauls of more than 600 miles, the RGD in November 2024 was 1.18 (1 would be perfect performance and 2 would be extremely poor), which is flat compared to the month of October at 1.18 and flat compared to November 2023. As expected, RGD performance has continued to improve since the slight increase leading up to July.
The trend for shorter hauls of less than 400 miles is similar. RGD for November 2024 for these shorter hauls was 1.16, which is approximately even with the previous month and with November 2023.
With so much of the industry waiting to know when the cycle will shift, typically a sustained increase in RGD over several months represents a change in the market. As the chart shows, RGD has not increased in recent months beyond typical seasonal pressure.
Geographically, the Northeast experienced the largest change of all regions, worsening by 1.8% since the month prior. The RGD still remains at low levels at 1.18 for the region. The other regions have changed marginally in RGD performance in November and remain at very favorable levels.
Voice of the carrier from C.H. Robinson
Market insights
- Most carriers have not experienced and are not anticipating any significant change in the market anytime soon
- Focused on cutting expenses, core lanes, staying disciplined, and leaning into other divisions/services to help work toward or maintain profitability
- Profitability remains a challenge as carriers see increases in insurance, claims, parts, and labor
Drivers
- Hiring drivers is not currently a challenge, and carriers can be more selective
- Long-haul carriers see an increase in applicants from private fleets as well as owner operators
- Retention is still challenging, but remains a focus for carriers
- With driver availability and trade-in equipment values being low, some carriers said fleets have grown
Equipment
- Truck and trailer trade cycles have stabilized and most have orders coming in quarterly for their replacements
- The used equipment market is still challenging; some carriers are hanging on to equipment and trying to find ways to generate revenue with it
- Parts, labor, and maintenance costs remain elevated
Refrigerated truckload
East Coast United States
Prior to the Thanksgiving holiday, the East Coast was following typical trends of remaining relatively soft. There is always a small produce season in Florida and Georgia during this time, but the market is not typically affected by it. The market has settled back down as of the first week of December and is expected to remain stable until the end of the year holidays.
Central United States
There was some lingering tightness in the Midwest at the start of December, but it has mostly cleared up. Market rates will likely remain stable until closer to the end of the year. Expect a surge in pricing around Christmas through New Year’s. The mid-south region is returning quickly to pre-Thanksgiving rates, expect to see tightness and a higher surge around Christmas and New Year’s, especially in south Texas as capacity exits the market temporarily for the last two weeks of December.
West Coast United States
November saw the typical seasonal shift in the West Coast produce industry. As Salinas Valley’s harvest wound down, shippers transitioned their operations to Yuma, Arizona, where they will remain until April. Increased volume leading into Thanksgiving caused rates and spot volume to increase.
After the Thanksgiving holiday, California-based markets have mostly returned to pre-holiday rates, which should remain flat until last weeks of December when Christmas and New Year’s markets finish off the year with rates similar to Thanksgiving and Yuba City festival.
Flatbed truckload
During the cold weather months, flatbed shipping efficiency is increasingly important. Severe weather frequently causes delays in loading, securing freight, and highway travel. Additionally, ice, snow, and high winds can hinder access to job sites and yards, further impacting loading and unloading operations.
Inefficiency in flatbed loading creates challenges for safety, costs, and sustainability efforts as well. Challenges with safe yard loading or delays due to cold weather increase dwell times, which lead to additional emissions as trucks wait to be loaded and tractor running times increase.
This not only impacts environmental quality but also contributes to higher fuel consumption, driving up costs for carriers and shippers alike. Addressing these inefficiencies requires collaboration between shippers, carriers, and facility operators to implement solutions that minimize delays and prioritize sustainability.
To combat this, shippers should re-evaluate facilities for driver and load securement resources. Indoor or covered facilities for tarping and load securement provide safer conditions to reduce workplace incidents and help cement a reputation as a shipper or receiver of choice.
Driver lounges or heated waiting areas in conjunction with idling rules while on site can also reduce emissions during dwell time. As inclement weather moves across the country, taking additional steps to prioritize safety and sustainability is key to a successful supply chain in the open deck market.