As of September 22, new trucking contract rates have seen a 1% rise compared to their predecessors. This increase, reported by DAT, is another potential indicator of recovery from a two-year freight recession. The new rate differential, a key measure, has sporadically ventured into positive territory over the past year, according to Chad Kennedy, Group Product Manager at DAT Freight & Analytics. Kennedy, during a weekly market update, expressed uncertainty about the sustainability of this trend, stating, “This might hang up there a little bit and then go back down. We’ll see.”
Market Pressures and Predictions
Recent months have seen positive developments in the market, with additional pressure in the Southeast due to devastating hurricanes.
Carriers’ contracts need to reflect inflationary pressures and the threat of nuclear verdicts, according to Werner Enterprises CEO Derek Leathers. Speaking at Morgan Stanley’s 12th Annual Laguna Conference in California, Leathers predicted a rise in rates during the 2025 bid season, with the extent of the increase largely dependent on capacity attrition and the overall economy.
However, the spot premium ratio, another crucial measure, indicates that spot rates continue to fall below contract rates, suggesting a soft market. Kennedy noted that the market has been soft for a little over two years now.
Recent trends in new trucking contract rates suggest a potential market improvement as the peak season approaches. With positive shifts in rate differentials and market pressures influencing predictions, the industry is showing signs of recovery. As trucking companies navigate through ongoing challenges, monitoring rate differentials and market pressures will be crucial for making informed decisions in the evolving landscape.
