Back to November 2024 Industry Update
November 2024 Industry Update: Flatbed
Flatbed volumes rose for the second consecutive month in October pushing average rates higher.
Spot Rates
Key Points
- The national average flatbed spot rate, excluding fuel, registered a 1.8% MoM, or approximately $0.04, increase in October, to $1.95.
- The average flatbed spot linehaul rate remained elevated on an annual basis in October, registering 5.6% higher YoY, but remains 2.1% below the LT average.
- The initially reported national average flatbed contract rate, exclusive of fuel, registered 0.2% lower MoM in October but was 3.8% higher compared to October 2023.
Load-to-Truck Ratio
Key Points
- The flatbed LTR was up 18.5% MoM in October and was 62.8% higher compared to the previous year’s levels.
- The flatbed LTR remained below the 5-year average by 2.6%.
Market Conditions
Flatbed Summary
According to the Commerce Department’s most recent report from August, U.S. single-family housing starts surged 16% MoM and 5% YoY, rebounding after hurricane-related delays. Building permits rose modestly, and builders are optimistic about the effects of recent interest rate cuts. They foresee lower construction costs and steady new home sales, but competition from existing home inventory could soften demand as mortgage rates ease. The Fannie Mae Home Purchase Sentiment Index (HPSI) climbed to its highest level in two years, with growing optimism around potential mortgage rate reductions. Despite this, the high cost of homes limits substantial growth in home sales, with 2024 tracking toward the lowest annual sales since 1995. The increased sentiment reflects hopeful consumer attitudes but highlights the challenge of affordability amid rising prices.
The ACT For-Hire Trucking Index, a metric for the health of the for-hire trucking market, rose to 54.5 in August (its most recent data). This reflects increased demand due to durable goods consumption and inventory positioning. Tim Denoyer, Vice President and Senior Analyst at ACT Research said, “Though, pre-positioning ahead of potential east coast port strikes is part of the story. Despite the strength of the U.S. economy over the past year, for-hire demand has been suppressed by the expansion of private fleets in the past 18 months, despite carriers operating costs being ~40% less per mile. Recent data suggests private fleet growth is moderating and is likely to continue. A welcome and necessary development for volumes to return to the for-hire market.”
The iconic Tropicana in Las Vegas was demolished on October 9, 2024 to make way for the Las Vegas A’s new $1.5 billion stadium, set to begin construction in April 2025. The project will drive demand for flatbed carriers, as materials such as steel, lumber and heavy machinery are needed for the building. This could significantly increase trucking activity for long-haul shipments.