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THETRUCKER.COM OCTOBER 2023 • 11
BUSINESS
Going down?
ANALYSTS DEBATE HOW LONG FREIGHT RATES WILL REMAIN LOW
Those who were hoping that freight rates
might begin to rebound in August were
disappointed — and the disappointment is
likely to continue for a few more months.
Average dry van spot rates increased
slightly in August, up just 0.7% from July
numbers, according to DAT Trendlines.
Compared with August of 2022, however, dry
van rates fell a more dramatic 17.7%.
The number of available trucks has
continued to grow while the number of loads
has not, resulting in a decline of 19.9% in DAT’s
load-to-truck ratio. More trucks competing
for fewer loads drives rates downward. The
average spot rate for dry van was $2.08 per
mile in August, according to DAT.
On the temperature-controlled side, rates
increased 2.6% from July but were down 13.9%
from August 2022, as the load-to-truck ratio
dropped by 37.8%. Spot rates averaged $2.50
for refrigerated trailers in August.
The flatbed load-to-truck ratio was even
worse, declining by 57.2% compared with
August 2022. Flatbed spot rates fell 1.1% from
July rates and 17.6% from August 2022 rates.
The average spot rate for flatbed freight in
August was $2.50, according to DAT.
Fuel costs rose by 12.6% during August but
are still 12.8% lower than in August 2022.
Loads posted on the Truckstop.com board
in August followed a similar trajectory, as
reported by FTR Transportation Intelligence.
The board reported some rate increases due
CLIFF ABBOTT | SPECIAL CORRESPONDENT
to the Labor Day holiday but reported that
average rates were still 21% lower than the
five-year average for that holiday week.
According to the Motive Monthly Economic
Report, key metrics in retail visits improved
in August. Motive’s data points differ from
other analysts in that its data is compiled using
GPS information collected from trucks
that utilize their equipment, counting actual
truck visits to retailers and other statistically
valuable locations.
Motive reported that retail visits were
higher in August compared with August 2022,
a good sign that the economy is beginning to
show signs of growth.
At the same time, the number of new
carrier registrations with the Federal Motor
Carrier Safety Administration grew in August,
while carrier exits declined sharply. This
means more trucks are engaging in the hunt
for freight, helping keep rates low.
The Motive report also indicates that
rising diesel prices and increasing costs for
credit will add difficulty for smaller trucking
operations.
The report states that Motive expects the
overall contraction (the removal of trucks
from the marketplace) to continue into
early 2024, and truck owners are advised to
prioritize operational efficiency. Conserving
cash is the best defense a small business has
against difficult business periods.
“Destocking” is a work that has been
iStock Photo
Freight rates continued their downward trend in August, but most analysts predict improvement during the fourth
quarter of the year.
frequently used during the freight downturn.
Simply put, it means retail establishments
and manufacturers have been ordering less
product to restock their shelves in response
to slowed sales. By measuring the number
of truck visits to distribution centers for the
top 50 retailers, Motive can create its “Big Box
Retail Index.”
The index for August didn’t quite make it
to July levels, primarily because of the July 4
SEE TONNAGE ON PAGE 14
Pilot program explores potential of mileage-based user fees
iStock Photo
The Eastern Transport Coalition has revealed the findings of an international
mileage-based truck pilot that highlights the potential of a mileagebased
user fee to reestablish the link between use and payment of the
transportation system.
THE TRUCKER NEWS STAFF
COLLEGE PARK, Md. — The Eastern Transport Coalition
recently revealed the findings of its international mileagebased
truck pilot, the first of its kind, highlighting the potential
of a mileage-based user fee (MBUF) to reestablish the link
between use and payment of the transportation system.
The real-world pilot was conducted from June to November
2022 and included more than 250 diverse commercial vehicles,
recording more than 8 million miles covering all 48 contiguous
U.S. states and four Canadian provinces. This initiative built
on the Coalition’s previous pilots by exploring how an MBUF
could account for the complexities of the trucking industry.
The work was conducted under the supervision of the U.S. Department
of Transportation’s Surface Transportation Systems
Funding Alternative (STSFA) program.
As the transportation industry evolves with technology, the
traditional fuel tax funding model is strained by the increased
fuel efficiency and the steady growth of electric vehicles. The
Coalition has explored MBUF since 2018 as an alternative to the
fuel tax through nine passenger and three commercial vehicle
pilots, public opinion surveys, focus groups and data analysis.
With a neutral stance on MBUF as the ultimate solution, the
Coalition’s emphasis lies in equipping decision makers with information
about how all users could pay for transportation.
From the beginning, the Coalition has encouraged the inclusion
of the trucking industry’s voice in the national conversation
surrounding MBUF. Acknowledging the trucking industry’s valuable
role in sustaining both daily life and the nation’s economy,
the Coalition has worked to bridge the gap between stakeholders,
policymakers, and industry experts. The outcome is innovative
strategies that not only address challenges faced by the trucking
sector but also enrich the broader transportation network.
“Central to the Coalition’s mission is its commitment to
cultivating open dialogue and transparency throughout decision-making,”
said Dr. Patricia Hendren, executive director of
the Coalition. “By fostering collaboration among stakeholders,
the Coalition envisions pioneering innovative solutions that
drive progress reflective of the complex trucking industry and
the evolving needs of our transportation system.”
David Heller, senior vice president of safety and government
affairs for the Truckload Carriers Association (TCA), also
weighed in.
“Looking for dollars to support our nation’s infrastructure
is not an easy task, and no stone should be left unturned,” he
said. “However, any mechanism, including an MBUF, needs to
be fully vetted to determine whether it is a viable option to consider
in the future.”
“Results from this international pilot underscore the potential
of MBUF as a catalyst for a transparent and scalable high-
SEE PILOT ON PAGE 30