Back to September 2024 Industry Update
September 2024 Industry Update: Flatbed
The flatbed sector continues to perform the worst of the three major modal types, as rates and volumes declined in August and remain below YoY levels.
Spot Rates
Key Points
- The national average flatbed spot rate excluding fuel declined further in August, dropping 2.4% MoM, or $0.05, to $1.92.
- The average flatbed spot linehaul rate turned positive on an annual basis in August, registering 1.8% higher YoY, but remains 5.7% below the LT average.
- The average flatbed contract rate exclusive of fuel fell slightly in August by 0.3% but was 0.9% higher compared to August 2023.
Load-to-Truck Ratio
Key Points
- The flatbed LTR declined by 17.2% MoM in August but remains elevated by 19.4% compared to the previous year’s levels.
Market Conditions
Flatbed Summary
The flatbed sector continued its streak of having the poorest performance amongst the three major mode types in August, as persistently soft volumes pushed rates down further. Ongoing weakness in the industrial sector combined with housing starts falling to their lowest level since May 2020 caused conditions to worsen for the already struggling sector. The U.S. Energy Information Administration (EIA) reported that oil production from major shale regions reached a six-month high in June, with output expected to rise to 9.85 million barrels per day, driven by improved well productivity. The Permian Basin, the largest U.S. oilfield, has been key to this growth, with production per new rig increasing. Despite the rise in oil output, Baker Hughes reported a 9.6% decline in total rig count within the Permian Basin compared to last year, reducing the demand for flatbed carriers transporting drilling equipment. This trend, along with economic contractions in the manufacturing sector, signals a broader slowdown in industrial activity.
Freight demand remains weak, as indicated by the for-hire trucking ton-mile index, which saw a 0.4% decline in June compared to May. According to Michigan State University Professor Jason Miller, the trucking industry has hit a low point but with slight improvement on the horizon. Weakness persists in several sectors, including oil and gas well drilling, machinery manufacturing and construction supplies. However, residential construction, particularly in Florida, has bolstered flatbed demand. The Southeast accounts for 60% of new home starts, driving significant regional freight shipments.