A predictive rate index released Tuesday showed truckload pricing “tumbling” further in the second quarter while less-than-truckload rates stabilize from a “sharp drop” in the first quarter.
The TD Cowen/AFS Freight Index — a compilation of data from third-party logistics provider AFS Logistics and investment bank TD Cowen (NYSE: TD) — showed excess truck capacity and soft demand had carriers competing for loads, driving rates lower during the first quarter.
The index captures trends from AFS Logistics’ freight audit, payments and transportation management platform that sees more than $11 billion in transportation spend across all modes annually.
Per-shipment linehaul costs were down 13.8% sequentially during the first quarter, 19.1% lower year over year (y/y). This was the first y/y decline recorded by the index since the third quarter of 2020. The spread between costs and miles per shipment has been narrowing since the second quarter of last year, “a strong indication that carriers are using rates as a primary tool to gain volume,” the report said.
Costs were also impacted by a shift toward shorter-haul shipments. The mix of local loads in the quarter increased 3.4 percentage points to 81%. The mix change may be indicative that shippers’ efforts to rightsize inventories are working.
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