Demand for dry vans continues to fall
After a sharp decline in 2023, the freight transport market shows signs of recovery. However, activity has remained the same in all sectors, and some are still volatile. For example, dry van contracts are at their lowest level for 3 years. This figure includes fuel surcharges.
DAT Freight & Analytics states that the January 2024 dry van rate is US$2.49. The last time the rate fell below US$2.5 was in 2021. Despite the dry van situation, the overall market continues to grow. First and foremost, conditions are favourable for customers. Shippers are in active dialogue about lower contract rates. Carriers, in turn, have high hopes for a recovery in volumes.
In addition to contract prices, spot prices are also falling, but there is still a large gap between them. This imbalance plays into the hands of customers who insist on low-contract deliveries. An oversupply of available vehicles and insufficient service demand fuels this. In addition, spot rates have been relatively low for a long time.
Analysts are of the opinion that stability in spot rates is necessary to reduce the gap between contract and spot rates. Spot rates have remained at the same level for several months now, which helps to reduce pressure on the contract market.
In December 2023, the spread in the dry van sector narrowed by 7 cents. As a result, the spread was 39 cents, the same as in 2019.
Demand for freight transport is still quite low but shows signs of recovery. The reasons for this are:
- a reduction in the impact of the pandemic when market processes stabilise after a sharp spike;
- strengthening of the dynamics of the retail sales sector;
- optimisation of business costs and revenues.
Experts also expect a surge in demand for dry van transport in the coming months. The precondition for this is the problems with sea freight. The maritime sector is currently in a precarious situation and experiencing delivery disruptions.
Forecasts for the global market
The global freight transport sector is showing reasonable growth rates. However, this is still not enough for a full recovery. Many experts are hoping that customers will shift from maritime to road transport. However, shipping companies are doing their best to retain customers with low rates. Road hauliers, conversely, cannot afford to let the already falling prices for their services fall any further. They have been hit hard by rising fuel prices and increased depreciation costs. At the same time, analysts expect truck orders to grow in the second half of 2024. However, operator rates will likely remain at the same level as in the previous period.
