Mixed Results Close Out September & 3rd Quarter

October 1, 2023

Analysis of Transport Pro database for the month of September shows improving metrics for refrigerated freight, very slight improvement for van, and seasonal declines for flatbed freight. The freight marketplace has been in recession during 2023 so any signs of historic trends is welcome news. An added plus for carriers is that fuel prices moderated with some declines at the end-of-month and beginning of October.

Historically, the 3rd quarter close of business has been one of the strongest periods for freight volumes, with tightening capacity. This year rate changes were modest but still significant enough to negatively impact broker margins. Partly that may be due to an exit of capacity due to the ongoing difficult conditions for truckers. The one bright spot for carriers of strong demand for specially flatbed equipment dropped off precipitously since June as shown in the graph below. Flatbed rates are plotted separately for Step Deck and standard 53’ flatbed equipment.

Brokerage margins slip
Overall, broker margins slipped from 16.1% to 15.5%. Volumes appear to be off for the September quarterly close. The UAW strike, although relatively brief, impacted freight levels but there are plenty of other ongoing factors including fewer oil wells being drilled and lackluster consumer demand.

The refrigerated sector has not seen the typical peaks of the Back-to-School plus Halloween push, and reefer equipment remains plentiful on produce lanes (USDA Truck Report). Still, broker margins took a small hit for that segment, falling from 14.2% to 13.8%. Reefer rates rose six cents per mile from August to September, consistent with the tighter margins.

Summary
The good news is that the eCommerce era means an expectation of strong van demand through the end of the year. Headwinds remain of higher interest rates. Trucking rates are historically low and brokerage margins remain under pressure. Look for continued reporting of results from the Transport Pro database to assist in understanding national freight trends.

Notes
Rates include fuel surcharge, where applicable. Rates are paid to Carrier by Brokers
Trips over 250 miles only
Over dimension, overweight, hazmat, LTL moves removed
Each month based upon about 40,000 monthly moves; Van, reefer, flatbed make up 95% of shipments
Flatbed consists of 53’ standard deck shipments; specialty flatbed equipment reported separately