Truckload spot market rates fluctuate due to factors such as supply and demand, fuel prices, and supply chain crises caused by disasters like Hurricane Helene.
“The spot market is the Wild West of the trucking market,” said FreightWaves’ Zach Strickland. “It represents the most extreme levels of volatility and the polarized edges of the industry.”
Truckload spot rates are expected to increase overall by only about 1% this year, according to FTR Transportation Intelligence, which forecasts a much bigger jump – 6.5 to 7% – in 2025.
Shippers could find more stability – and avoid spot market fatigue – if they contracted with tested, trusted carriers.
The Spot Market Can Be Wearisome for Shippers
The spot market rate is the price to move freight soon. Thus, trucking spot rates “are typically negotiated between shippers and carriers on a case-by-case basis, often influenced by prevailing market rates,” SeriousTruck.com said.
Booking carriers on a case-by-case basis can be tiresome – not to mention time-consuming and risky. A safer proposition is to contract with a vetted carrier that can serve all your shipping needs.
What Causes Spot Market Fluctuations?
“The spot market in trucking is super dynamic, with prices rising and falling all the time, as supply and demand fluctuates,” Paddy Hirsch said on NPR’s Morning Edition. “But during the pandemic, of course, we saw a massive surge in demand for goods, and that led to a surge in demand for truckers to ship those goods, and, of course, that led to a surge in transportation prices.”
Supply Chain Crises
COVID-19, of course, falls into the supply chain crisis category. So do natural disasters like Hurricane Helene, which has closed part of Interstate 40, for instance, for perhaps a year.
Supply and Demand
“Spot market rates are directly impacted by supply and demand – if demand for a product is high and supply is low, spot market rates go up. If the demand for a product is low and supply is high, spot market rates go down,” Truckstop.com said. “Furthermore, when you factor in the number of trucks and drivers that are available on the road at any given time, spot market rates can really fluctuate.”
Seasonal Variations
Spot rates typically are higher during peak holiday shipping season and harvests, when there is increased demand for transportation services. Fall hurricanes and winter blizzards also can affect spot rates.
Fuel Prices
The price of diesel affects spot rates because it directly impacts carriers’ operational costs. Carriers will try to pass those costs on to shippers in the spot market.
Economic Conditions
“Economic conditions play a crucial role in trucking spot rates,” SeriousTruck.com said. “During periods of economic growth, spot rates may rise as demand for goods and transportation services increases. Conversely, during economic downturns, spot rates might decrease due to reduced demand.”
Shippers Can Avoid the Spot Market with Tested Carriers
Emergencies happen, but shippers can avoid the spot market as much as possible by contracting with tested carriers. That’s where Test Drive comes in. We utilize advanced technology for optimal matching and facilitating seamless transitions to direct contracts.
Test Drive is a platform where shippers can test carrier performance, moving actual shipments under our authority. We serve as a strategic resource for shippers to procure vetted, trusted carriers.
Test Drive Offers a Better Path Forward
Test Drive is an anti-broker, promoting transparency and fostering trust between shippers and carriers while operating with a fixed margin. We also provide open lines of communication, full accountability, and paths to increased profits.
We empower our shipping partners to get off the spot market trucking roller coaster and build direct carrier relationships. We enable shippers to save money and time by connecting them to vetted trucking companies to develop a procurement strategy to weather market ups and downs.
Experience the Test Drive difference. Request a quote today.