Watch Now

Brokers: spot rates “escalating sharply”

(Photo: Jim Allen / FreightWaves)

The unprecedented surge in truckload volumes to restock retail stores with groceries, soap and hand sanitizer, bottled water and electronics is tightening trucking capacity and pushing spot rates up.

On a national basis, contracted truckload volumes are now up 16.5% year-over-year (OTVIY.USA). Meanwhile, the rate at which these loads are being rejected by carriers and brokers has reached 9.76% (OTRI.USA), well above any level reached last year except during the Christmas holiday. In Allentown, Pennsylvania, carriers and brokers are rejecting 15.5% of loads; in Quincy, Illinois, they’re rejecting 32%. The tightest regions in the country are the extreme Northeast, including Maine, and the Mountain West, including Denver and Grand Junction. 

Volume growth has been biased toward short-haul refrigerated freight: reefer volumes are up 25.37% year-over-year (ROTVIY.USA); and short-haul loads are up 26.6% year-over-year (SOTVIY.USA).

Jeff Scharbach, an owner-operator active in driver-oriented Facebook groups, reached out to FreightWaves to talk about produce markets. 

“On Friday [March 13] around 3:00 p.m. I got offered $2,350 on about 750 miles out and back to Boise, and the broker was specifically talking about the panic and all the restocking needed,” Scharbach wrote. “I took the load, and while out at the WinCo waiting to get loaded, I heard the guys working there talking about how that day they were shipping out 13 million pounds of product to restock, whereas on a normal day it was more like around 1 million pounds. They said they were shipping 4 times the amount of groceries than they do leading up to Thanksgiving.”

Because recent volume growth has been biased toward short-haul temperature-controlled freight, it hasn’t translated to any growth in intermodal. Rail intermodal volumes have deteriorated steadily since the beginning of February. Although loaded 40’ volumes outbound from Los Angeles have begun to recover (ORAIL40L.LAX), levels are still well below any point prior to the Chinese New Year-coronavirus collapse in mid-February.

Wait times at shipper facilities across the country are at 159 minutes (WAIT.USA), an all-time record, and above most carriers’ threshold for charging detention times. Carriers typically allow 120 minutes of waiting while loading and unloading before they start charging shippers for their time; now the average load will incur detention. 

Major outbound markets have seen wait times spike even higher – Atlanta wait times are averaging 277 minutes (WAIT.ATL), and in Philadelphia, trucks are waiting 322 minutes on average to be loaded and unloaded (WAIT.PHL). 

Over the weekend, the Federal Motor Carrier Safety Administration (FMCSA) waived hours of service requirements for carriers participating in coronavirus relief efforts, which include the movement of medical supplies as well as the emergency replenishment of grocery stores.

The tightness in trucking freight markets is being driven by widely distributed growth in freight demand, or volume, although some freight brokers believe that as the coronavirus health crisis drags on, the supply or capacity side of the marketplace will also tighten. Truckers may be less willing to drive – and receivers may shut down – if new infections keep accelerating.

(Map: FreightWaves SONAR. Height indicates market share of outbound freight; color indicates tender rejection rates).

An executive at a New York State-based freight brokerage said “anything booked today will look cheap compared to Thursday and Friday.”

The CEO of a Texas-based brokerage commented that the “produce market is strong,” and a Chicago-based brokerage CEO said that “rates will be high this week.” When asked which lanes specifically would be higher, he said, “all of them.”

An executive at a freight brokerage heavily concentrated in refrigerated loads said that his shop is dealing with “approximately twice as much freight as we normally do, and revenue per load is climbing steadily.” Spot rates are “escalating sharply,” he added.

FreightWaves’ SONAR platform has spot rate data from Prices on several lanes have inflated this year. Dry van spot rates from Atlanta to Philadelphia (TSTOPVR.ATLPHL) are up 11.4% since February 2 to $1,583.68, inclusive of fuel, or $2.03/mile. Spot rates for reefer equipment on the same lane are $2.15/mile. 

At a major asset-based carrier, a brokerage executive worried about how long the rush to replenish stores would last.

“As more businesses close or have dramatic slowdowns, it might impact volumes,” he said. “This replenishment has been a nice shot in the arm for demand but we’re not sure how long it lasts. It would appear consumer spending and the overall economy is about to slow down big time.”

As schools and businesses – including brick-and-mortar retail and bars and restaurants – close around the country, the widespread expectation in the financial community is that consumer spending will go negative on a year-over-year basis. S&P 500 trading was halted this morning as futures gapped down by 7%, triggering the market’s ‘circuit breaker’: this morning was the third time that has occurred in a week. Meanwhile, 10-year U.S. Treasury yields fell to 0.84%, reflecting investors’ desire for stable returns and expectations of deflation and lower asset prices in the future.


  1. Luis Trevino

    Good relationships are out the window!
    Brokers and shippers are not playing by the rules. In certain areas prices are being fixed or price gouging is occurring, who is looking out for the small trucking companies.

    Small local trucking companies are the ones that bring back essential supplies to the communities they are from. Larger trucking companies are looking out for their big customers who do not ship or receive essential supplies to their communities.

    Companies will start to make decisions to stop sending trucks to areas where price fixing is happening leading to more shortages in supply.

    Trucking companies are paying for l the labor, fuel to transport, and insurance to transport. The brokers have no skin in the game they are strictly watching from the sidelines enjoying profits while someone else is taking the losses. There needs to be regulation to limit brokers and stop owner operators from running on there own permits this is driving trucking prices down.

    We understand fuel has fallen and too many trucks with no work or freight because of the shutdown. But in relation to this there is a lack of drivers out looking for freight because there companies are shut down as well. So the very few companies that are out there are being ripped off or being forced to take cheap freight to move trucks.

  2. Noble1 suggests SMART truck drivers should UNITE & collectively cut out the middlemen from picking truck driver pockets ! UNITE , CONQUER , & YOU'LL PROSPER ! IMHO

    Quote :

    “spot rates “escalating sharply”

    Is a percentage of this increase going to be shared and added on to driver wages ? You know those taking all the risks out on the road and especially during a freaking pandemic exposing themselves to the virus . Or are the majority of the gains to go in the pencil pusher’s pocket sitting comfortably and safely behind a desk ?

    This is your time truck drivers TO UNITE AND PUT YOUR FOOT DOWN !

    But you won’t ! Why ? NO SPINE ! So you’ll allow yourselves once again to be used and abused like a mule and expose your vulnerability FOR PEANUTS to a freaking contagious life threatening viral pandemic !

    Where are your brains ??? Now you know why most of you are abused , cause you have no brains ! You keep bending and getting it up the wazoo ! While most are being asked to self isolate , you’re being asked to do even more during this extremely dangerous pandemic exposing your health and lives to extreme danger . They’ve even waived HOS for some ! WAKE UP ! This is ABUSE beyond belief ! Go ahead tire yourselves even more , weaken your immune system in the process. If you become infected you only have yourselves to blame for bending like brainless zombies !

    Take a freaking stand out of self respect for at least once in your lives ! Enough is enough !

    In my humble opinion ……….

    1. Stephen Webster

      This rise in rates will only last until C 19 is bad truck drivers and the homeless are at a huge risk. No government seems worried about either group.

Comments are closed.

John Paul Hampstead

John Paul conducts research on multimodal freight markets and holds a Ph.D. in English literature from the University of Michigan. Prior to building a research team at FreightWaves, JP spent two years on the editorial side covering trucking markets, freight brokerage, and M&A.