Professor Jason Miller, a respected supply chain expert at Michigan State University, emphasizes the need for more positive developments in the trucking industry as demand remains subdued. The most recent release of the for-hire trucking ton-mile and revenue indexes (TTMI), which are based on output across 41 freight-generating industries, indicates that May’s seasonally adjusted ton-mile index shows freight demand continues along the bottom of a trough, albeit still at absolute levels comparable to what we observed in late 2018.
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Seasonally adjusted trucking ton-miles increased 0.4% in May from April. On a not-seasonally adjusted basis, this increase was 0.8% (which indicated the seasonal adjustment model expected a 0.4% increase due purely to seasonality). Regarding absolute demand levels, trucking demand is near where it was in Q4 2018, which saw a slight decline from the peak levels observed in April – August of that year. This trend, while surprising, is a result of the industry still recovering from the significant impact of the COVID-19 pandemic, with volumes down ~4% from the all-time seasonally-adjusted record in March 2022.
Miller said, “As I’ve frequently noted, I don’t see much of a volume recovery coming this year. Sectors like nonmetallic mineral products manufacturing—which accounts for ~5% of for-hire trucking demand and is the 3rd largest manufacturing sector contributor to trucking demand—have given up all of their post-COVID gains and are trending down. This is consistent with slowing construction activity and declining oil drilling.
Load-to-Truck Ratio
The number of dry van load postings decreased by 2% last week and is 11% lower compared to the same time last year. Last week’s volumes were 12% higher than the levels in Week 30 over the last seven years, excluding the years affected by the pandemic in 2020 and 2021. The equipment posts by carriers were down 6% week over week, leading to an increase of 5% in the dry van load-to-truck ratio (LTR) to 4.06. This is the highest LTR in eight years, except for 2020, when it was 4.23.
Linehaul spot rates
After dropping by a penny per mile last week, dry van linehaul rates have decreased by $0.06 per mile in the last month. The national average dry van linehaul rate now stands at $1.64 per mile, almost the same as last year. According to DAT’s Top 50 lanes, which are based on the volume of loads moved the rates have dropped by $0.03 per mile to $2.03 per mile. This is $0.39 per mile, higher than the national average.
