Surprising surge: Trucking spot market rates climb overnight

The spot market heat map in SONAR, which tracks sudden shifts in spot market rates, has turned extremely blue, indicating that spot rates are suddenly surging well beyond recent trends.

It’s happening all over the country, and it happened overnight. What makes this unusual is that a sharp market development such as the one we’re currently experiencing is happening without tender volumes or rejections indicating market stress.

In fact, trucking volumes are anemic, and tender rejections are sitting at 5.5%.

Have truckers suddenly discovered how to get higher spot rates, or is something else in play? Normally, tender data would signal that the market is heating up, and rejection rates would significantly rise.

This usually happens when volumes are also surging. This time, however, the tender data stayed flat, suggesting that the current spot market rate increases are driven by supply and not demand. To ensure this wasn’t a data anomaly, the FreightWaves team conducted a number of market checks with large carriers and brokers, and they were seeing the same—albeit confusing—developments: low volumes but surging spot rates.

As we continued to investigate, our channel checks confirmed what we’ve been talking about for months: the administration’s recent immigration enforcement efforts are starting to have a significant psychological and behavioral impact on immigrant truck drivers and carriers that hire truck drivers with questionable immigration status.

In an article in the Serbian Times, an immigration lawyer warned Serbian truck drivers to stay off the roads for fear of being detained or deported, risking a permanent ban.

He says, “I advise my clients who drive trucks that even if they have a valid work permit, they should not go on the roads.” The article describes that being deported might not be the worst thing. He goes on to describe dire conditions in immigration holding cells and, because of the significant backlog of cases, that hearings may be postponed indefinitely and bail is unlikely, so they may stay behind bars for a long time.

The question on everyone’s mind in trucking is whether this is a temporary blip or the start of a spot market squeeze that could result in much higher rates and a capacity scramble.