Updated trucking rate analysis from our friend Dr. Jason Miller at Michigan State University:
Truckstop.com just put out their spot rates and it does appear that we are finally reaching the bottom of the cycle.
Below is a chart of the dry van rates in nominal form and a deflated set of rates where I incorporated the quarterly GDP deflator to try and remove effects of inflation. I've also included the EIA's monthly diesel prices to rule out that the decline is due to lower fuel surcharges.
Here is the plot:
We can see that diesel prices certainly can't account for the decline, as they are way above 2017 levels. Spot rates have dipped back down to June and July 2017 levels, but it appears that the rate of decrease is flattening out a bit.
With spring freight volumes about to hit, I would expect that spot rates will level off at the current level. With contract freight rejection as low as it currently is, coupled with the fairly low load-to-truck ratios reported by DAT, I'm doubting we are going to see much of an increase in spot rates for the rest of the year, barring some unforeseen event.
Jason Miller, PhD
Assistant Professor of Logistics
Department of Supply Chain Management
Eli Broad College of Business
Michigan State University