Back to January 2025 Industry Update
January 2025 Industry Update: Flatbed
Flatbed demand continued to bounce back, keeping spot rates elevated above the previous year’s levels.
Spot Rates
Key Points
- The national average flatbed spot rate, excluding fuel, registered a $0.03 MoM increase, or 1.3%, in December to $1.94.
- On an annual basis, the average flatbed linehaul spot rate was up 4% YoY but remained below the 5-year average by 2.3%.
- The initially reported national average flatbed contract rate, exclusive of fuel, was up 1% MoM in December and virtually flat compared to December 2023, registering 0.2% lower.
Load-to-Truck Ratio
Key Points
- The flatbed LTR increased in December by 40.9% MoM, rising from 11.13 in November to 15.68.
- Compared to December 2023, the flatbed LTR was 94.8% higher YoY but remains 36.5% below the 5-year average.
Market Conditions
Flatbed Summary
The U.S. Census Bureau’s most recent residential statistics release from October 2024, showed housing starts declined by 3.1% from September and 4% YoY, with single-family starts dropping 7% MoM. However, flatbed demand has been supported by significant activity in the Midwest, particularly Ohio, Kentucky and Indiana. Florida has also experienced reliable demand, and according to the Census Bureau’s October report, single-family permits rose 0.5% indicating potential future growth. According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) Chief Economist Robert Dietz, “While builder confidence is improving, the industry still faces many headwinds, such as ongoing labor shortage and buildable lots along with elevated building material prices.”
The American Trucking Association (ATA) Chief Economist Bob Costello stated, “The slow and choppy climb off the bottom continued in October. Since hitting a low in January of this year, tonnage is up a total of 3%, plus the index is up sequentially in the last four months.” ATA’s latest For-Hire Truck Tonnage Index equaled 114.6 compared to 113.3 in September. Compared to 2018, last month’s reading was 1% lower, and unlike spot market freight indexes, the ATA For-Hire Truck Tonnage Index is dominated by contract freight based on surveys from its members since the 1970s, reflecting a gradual improvement in freight demand.
The October Logistics Manager’s Index (LMI) read 58.4, down slightly from September’s reading of 58.9. The overall index has increased for twelve consecutive months, marking a full year of expansion since November 2023 reading of 49.4. The logistics industry has expanded steadily and sustainably as the index is up 9.0 points compared to November last year. The industry has seen a healthy, organic recovery in 2024 based on steady improvements in the economy’s fundamental industries. According to Zac Rogers, Associate Professor at Colorado State University and one of the LMI authors, “The most notable movements in the LMI this month is the predicted slowdown in the expansion of Inventory Levels, keeping with typical seasonality patterns.”
While challenges remain, the slow but steady improvement in freight tonnage and logistics expansion suggests a cautiously optimistic outlook for carriers, brokers and shippers heading into 2025.