Contract? What contract?
SONAR has a new set of indices. The National Truckload Index (NTI) and its sub-indices were announced yesterday at the Future of Supply Chain event in Arkansas.
The chart below shows the NTIDL – National Truckload Daily Linehaul. This is a daily posting of real-time spot rates excluding fuel.
For a driver, it provides a solid benchmarking tool on 250,000 lanes to set rates. The exclusion of fuel is also quite useful to see the true direction of rates nationally and by lane without “noise” from diesel prices.
On the left side is a chart showing the dry van contract for the nation in orange compared to the NTIDL or national spot rates. Both numbers exclude fuel, so it is a true comparison.
On the right-hand side is a chart that compares the number of contract truckload tenders to the number of contract load rejections.
The charts show that as contract rates slowly increased, the rejection of those loads dropped. The impact of falling spot rates not being as attractive for contract carriers to chase was impacted by dropping load volumes.
Note that once spot rates fell below contract rates a trend in tender volumes and rejection rates began to take hold.
By early May volume tenders dropped significantly as rejections slowed their descent and actually stabilized. Remember that these numbers are contract volume tenders and rejections.
A softening market of truckload volumes is being magnified by increased contract rates and spot rates trending well below those levels. Shippers are actively utilizing the spot market as a rate discounting tool.
This further reduces the volume of loads being tendered and also stabilizes tender rejections as contract carriers have reduced optionality.
Read more articles from Michael “The Dude” Vincent
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