THERE ARE MORE
CARRIERS ON THE SPOT MARKET SO THERE’S BASICALLY MORE TRUCKS VYING FOR
LESS FREIGHT. THAT’S PRETTY MUCH BEEN THE CASE IN 2015,”
—KEN HARPER,
DAT DIRECTOR OF MARKETING
Costello, however, believes the
nation’s economy will weather the cur- rent global economic storm and that the Fed will raise rates in October or December, though not by much. The negative result would be that debt burdens would increase with higher interest rates. On the plus side, credit would loosen. With higher potential
margins, banks would be more likely to make loans. Meanwhile, people living on fixed incomes would earn higher returns. He believes the stock market will continue to be volatile as investors try to anticipate the Fed’s next move.
STUDYING THE SPOT MARKET Pricing analyst Mark Montague
with DAT, the industry’s largest spot marketplace, estimated the spot market has grown from 15-20 percent to 30-35 percent of the overall market in recent years, thanks in part to the growth of third party services such as C.H. Robinson and Landstar. The spot mar- ket traditionally has been led by smaller carriers, who lack the market power and staffs of larger carriers and therefore rely on load boards as their sales force. Now, many large carriers have their own brokers. The spot marketplace made huge
gains in 2014 – what Ken Harper, DAT director of marketing, called the “year of the perfect storm.” Winter weather
paralyzed the trucking industry for a couple of months, and a lot of freight normally handled under contract moved to the spot market because shippers’ contract carriers simply didn’t have capacity. Rates reached record highs. In 2015, shippers changed some of
their contracts to avoid getting stuck in the same situation. Meanwhile, carriers began hiring more drivers, and more of them moved to the spot market. “There are more carriers on the spot market so there’s basically more trucks vying for less freight. That’s pretty much been the case in 2015,” Harper said. Broughton said the weather was
a factor in last year’s move to the spot market, but there were others. “Early in the year, many argued
that it was the result of the weather, but by the time we got around to this part of the year, it obviously wasn’t,” he said. “There weren’t any snowstorms in July last year – at least not in the Northern Hemisphere.” Instead, Broughton said the driver
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ARKANSAS TRUCKING REPORT | Issue 5 2015
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