Spot Rates Are Up 31%. Load Count Is Down. Do the Math.
The U.S. Bank Freight Payment Index shows $2.14/mile dry van spot rates. It also shows 13% fewer loads. Here's why those two numbers don't cancel out.
By Herman Armstrong
Dry van spot rates hit $2.14 per mile in May — up 31% year-over-year. If you're running a small fleet on spot freight, that sounds like good news. It isn't.
The U.S. Bank Freight Payment Index processes more than $46 billion in freight payments annually, and its transactional data — not a survey estimate — shows contract volumes dropped 13.3% from March to May. Spot shipments fell from 1.31 million in April to 1.11 million in May. Rates are up because the load pool got smaller and tighter, not because demand came roaring back. Fewer loads repriced higher is a squeeze, not a boom.
Then there's the diesel timing problem. After hostilities escalated in the Middle East, diesel jumped roughly $1.31 per gallon in three weeks while linehaul spot rates sat flat. Fuel costs move like lightning. Spot rates move like molasses. If you were running spot during that stretch, your settlement sheet bled while the headline number looked fine on a chart somewhere.
Even after rates caught up, the margin math stays ugly. ACT Research flags that fuel, insurance, financing, and equipment costs are eating a significant chunk of that rate increase. $2.14 per mile gross is not $2.14 per mile net. It never was, but it's worth saying out loud when brokers start congratulating you on the market.
The shipper side of this is almost darkly funny. Alex Terry, director of transportation at Veritiv, put it plainly in the U.S. Bank press release: "As contract rates continue to catch up to spot, cost exposure may increase even without a corresponding increase in shipment activity." He's warning shippers their budgets are at risk. Read that same sentence from the other side of the bill of lading: shippers are bracing for higher rates while moving less freight. That's not a demand surge. That's a renegotiation.
The number shippers are worried about is $2.14. The numbers that matter to a 3-truck operation are the load count that's down 13%, the diesel spike you already absorbed, and the broker invoice that's 47 days old and still not paid.