A year of overall normal volumes ends on a high note.
TORONTO –TransCore Link Logistics concluded 2019 with a strong fourth quarter as Loadlink’s load volumes climbed while truck volumes fell. Fourth quarter load volumes were up a solid seven percent when compared to the previous quarter.
As per the usual seasonal rush, December load volumes performed very well with numbers resembling those in mid-2018 when demand was at a healthier level. Declines in both truck and load availability were expected and seen at the end of December. Despite this late decline during the peak holiday period, December’s overall load volumes surpassed November by five percent month-over-month and beat December 2018 numbers by 12 percent year-over-year.
2019 Freight Volume Results Highlighted:
- Monthly load volumes inclined for three consecutive months since September, representing the largest period of consecutive month-over-month increases.
- The most significant month-over-month increase took place in January, with load volumes 31 percent higher than December 2018.
- The most significant year-over-year increase took place in December, which was 12 percent higher than December 2018.
- Year-over-year, the total load volumes averaged 30 percent lower compared to the total average volumes in 2018 which were higher than normal.
2019 equipment volume comparisons were benchmarked against an unprecedented year in 2018, marked by a reduced number of trucks on the spot market as ELD mandates caused a shortage in truck availability. Load volumes hit record highs, which caused carriers to respond by procuring more trucks to meet demand.
With the fulfillment of new truck orders in late 2018 and early 2019, the introduction of additional capacity during a year of reduced freight in 2019 caused more trucks to be available on the spot market. Equipment volumes trended very similarly to 2018 but at higher levels for each month except February. Overall equipment volumes for the year were the highest in Loadlink’s history, which may be a result of the additional capacity added to fleets following a busy 2018.
December’s equipment postings declined 14 percent when compared to November and increased 11 percent when compared to December 2018. May of 2019 had the highest number of truck postings in Loadlink’s history, and February had the lowest. Loadlink’s monthly Truck Index broke the 200 mark for the first time this year, indicating that the network reached double the number of trucks compared to when the index was first established. This is significant as it highlights a growing carrier-base on Loadlink, as well as a shift in spot market capacity.
In December, capacity tightened by 19 percent to a more competitive truck-to-load ratio of 2.78 from 3.43 in November. Year-over-year, December’s truck-to-load ratio barely changed by one percent compared to 2.82 in December 2018.The year began with healthier ratios, but expanded as growing capacity outpaced freight volumes. July and October exhibited periods of loose truckload balance with values over 4.00, but has since contracted over each month.
Industry Impact on 2019, Early 2020 Outlook
The past year proved to be a tumultuous period for the freight industry following a booming 2018 when freight volumes reached new highs. An overabundance of capacity, global trade uncertainties, rising insurance costs, and depressed rates all played an evident role in the decline of the overall Canadian freight market. Canadian spot market conditions may have faltered compared to a remarkable 2018, but proved to be more consistent and in-line with steadier periods seen in recent years.
Volumes in early 2019 started off strong, but declined entering the second quarter. This slump continued throughout the year with pronounced effect during the slower summer season, but steadily rose within the last quarter of 2019. The introduction of the FMCSA’s Drug and Alcohol Clearinghouse may change 2020’s early supply outlook, as increased drug testing and tighter monitoring of offenses may have removed some capacity off the market. With key trade agreements looking to be enacted in early 2020, global market conditions may see some improvements further in the New Year. As new regulations and further enforcement come into play, the balance of supply (equipment) and demand (freight) may shift, which could bring rate increases alongside it.
According to TransCore Link Logistics’ Rate Index tool, 2019’s monthly Canadian van rates were depressed compared to those seen in 2018, but did reach an annual high this past December. Month-over-month and year-over-year, the rate in December was two percent higher. Cross-border van rates on Loadlink saw larger decreases compared to last December with a 10 percent year-over-year decline, but was virtually unchanged from November 2019. Lagging rate data may alter the above comparisons, but historic seasonal trends align with rates being elevated during the peak holiday shopping period.
The impact of global trade wars, especially those affecting our North American neighbours, may have played a larger role in the differences seen in rates compared to last year. Nonetheless, December normally sees rates increase as retailers would require stocking up on inventory in preparation for the busy shopping season during a period when less drivers are available on the road.
About TransCore Indexes
Truckload spot rates in specific areas can be accessed from TransCore’s Rate Index truckload rating tool Real-time and historical data on total truck and load volumes, as well as ratios in specific areas, can be accessed from TransCore’s Posting Index.
TransCore’s Canadian Freight Index accurately measures trends in the truckload freight spot market. The components of the Freight Index are comprised from roughly 6,400 of Canada’s trucking companies and freight brokers. This data includes all domestic, cross-border, and interstate data submitted by Loadlink customers.
About TransCore Link Logistics
Looking for a better way to match available freight loads with trucks, TransCore Link Logistics developed Loadlink in 1990. Loadlink is a load board connecting brokers, carriers, owner operators and private fleets in Canada to a real-time database of 18 million loads, shipments, and trucks – the largest in the industry.
The monthly Canadian Freight Index now defines the freight movement spot market. The company also provides its customers with dispatch solutions, ACE/ACI eManifest, Posting Index, Rate Index, credit solutions, factoring, online transportation job boards, mileage software, and more.