Dive Brief:
- New contract rates rose 1% compared to those that they replaced as of Sept. 22, another potential sign of improvement from a two-year freight recession, DAT reported Tuesday.
- The measure, dubbed the new rate differential, has crept into positive territory occasionally during the last year or so, DAT Freight & Analytics’ Group Product Manager Chad Kennedy said on a weekly market update.
- “This might hang up there a little bit and then go back down. We’ll see,” Kennedy said. “We’ll keep a close eye on that and see if contract rates continue to go up.”
Dive Insight:
Analysts and executives have noted positive developments in the market in recent months, and devastating hurricanes have added pressure in the Southeast.
Carriers’ contracts need to rise to reflect inflationary pressures and the threat of nuclear verdicts, Werner Enterprises CEO Derek Leathers said last month at Morgan Stanley’s 12th Annual Laguna Conference in California.
“It is our belief that rates will need to go up as we go through the 2025 bid season,” Leathers said. “The question will be how much, and that's really going to be dictated in a large degree by what continues to take place with capacity attrition and the overall economy.”
Meanwhile, another key measure, the spot premium ratio, showed spot rates continue to fall below contract rates with downward pressure, indicating a soft market, Kennedy said.
“We’ve been in a soft market for about a little over two years now,” he said.
