August’s Weekly Market Update dives into the recession and what it means for flatbed rejections and port bookings. Keep watching (or reading) for more!
According to DAT, recent flatbed equipment post levels reached an all-time high, surpassing the previous record set in late 2019.
YoY flatbed load-to-truck ratios supporting this notion: down 51% and 42% MoM. Flatbed spot rates remain above 6% YoY, however both the WoW and MoM trends are declining.
Pandemic years aside, and historically speaking, flatbed demand tends to tail off towards the end of the year as the infrastructure, industrialized, and housing sectors cool off.
As most reporting on these sectors are done on a monthly or quarterly basis, flatbed rejections can be used as a good leading indicator for future demand within these sectors.
The sentiment amongst those heavily involved in the housing market has already shifted as foot traffic for existing homes has already slowed over the past 30 days. A significant slowdown can be contributed to the 2nd .75 percentage point increase in interest rates as the Fed continues to try and battle roaring interest rates.
The back-to-back increase brings the current overnight funds rate to its highest level since December of 2018. While the rate hike itself comes as no surprise, the size of the point increase has directly affected buyers, sellers, and lenders.
The slight and more than likely temporary decline in 30-year fixed rates only supports the fact that as lenders application volumes have declined, so has the need to push down rates a tad to offset dwindling demand.
Since the average peaked back at the end of June, around 6%, current 30-year fixed rates have fallen into the low fives. Still a significant increase from the below 3% rate back at the beginning of the year.
Port of Oakland dwell times increased to 14.89 days this month, up 49% from July. No doubt that the owner/operator protests surrounding the notorious AB5 labor law has restricted the ports typical workflow.
The disruption has caused certain vessels to skip Oakland as a port of call displacing and delaying containers as well as throwing off typical means of export, especially for the US Agricultural industry.
Bookings into the US continue to rival pre-pandemic levels as inventory growth remains, consumer goods spending slows, and economic uncertainty continues to linger especially as (by definition) a recession is among us.
This has been your Bridge Logistics Market Update for the week of August 1st, 2022.