When will the spot market hit the bottom? Soon, the poll says

If your business thrives when spot rates are high, there is both good and bad news. The bad news is that those rates haven’t found a threshold yet. The good news is that they will likely do so in the next three to six months, only to start climbing again in the second half of 2023.

At least that’s the most shared opinion of the nearly 400 carriers and brokers / 3PLs that FreightWaves Research interviewed last week. When asked when spot rates would bottom out in the current cycle, 44.05% answered in the first quarter of 2023 and a further 25.57% in the second quarter of 2023. Only 13.42% thought the low it would arrive in the third quarter or later.

[Source: FreightWaves Research]

Spot rates have already reached their lowest point, said 16.96% of respondents, or about one in six. It is possible that rates have started to rise again for their businesses, but FreightWaves’ National Truckload Index (NTI.USA), a seven-day moving average of spot rates, has continued to decline since the survey was submitted for the first time by email. The index recorded around $ 2.58 on November 7 and currently stands at around $ 2.54.

Additionally, NTIF.USA, a 30-day forecast based on historical rates, imports, wholesale fuel prices, and contract rate data, predicts that NTI.USA will stop at around $ 2.45 in mid-December.

This means that carriers are not out of the woods yet. But now they might see glimpses of sunlight.

[Source: FreightWaves Research]

There is consensus that rates will change once we get past the first half of 2023. Look at the trend shown by the three most common responses for where respondents thought rates would be at the start of each of the following quarters.

Watch: when will the spot market hit the low?

Q2 2023 (6 months from now)

  1. 10 – 19% less (21.27%)
  2. 1 – 9% less (19.75%)
  3. More or less the same (18.99%)

Q4 2023 (12 months from now)

  1. 1 – 9% more (22.53%)
  2. More or less the same (21.03%)
  3. 10 – 19% more (15.95%)

Q2 2024 (18 months from now)

  1. 1 – 9% more (24.30%)
  2. 10 – 19% more (21.01%)
  3. More or less the same (14.43%)

If you analyze the results of this question using weighted averages, where 7 equals “Plus or minus”, you will see scores of 5.95 for the second quarter of 2023 (1% -9% down), 7.14 for the fourth quarter 2023 (more or less the same) and 7.81 for the second quarter 2024 (1% -9% more).

A difficult time for carriers

[Source: SONAR NTI.USA chart, with NTIL.USA and DTS.USA]

Many carriers were hit by high fuel prices and equipment costs in 2022. They also faced inflationary pressures that pushed consumer and industry demand down. They have been forced to navigate the falling spot rates which now threaten to drag contract rates down for the foreseeable future.

[Source: FreightWaves Q4 2022 Shipper Rate Report, US Bank]

For most of this year, the supply of freight to the spot market has been significantly cheaper than contracted freight, but this reality won’t last forever. The spread will naturally begin to narrow as contract rates are offered lower to better reflect the spot market. The percentage of contractual transport and compliance is expected to decrease. If this happens, more goods will be moved to the spot market, changing the balance between cargo volumes and truck capacity.

[Source: SONAR RATES.USA baseline chart]

The fourth quarter of 2022 shows the freight market in an interesting position. As the high season approaches (or does not approach), the disadvantage of the carrier market also subsides. It remains uncertain what kind of seasonal increase volume and waste data they will see from holiday consumption, if any.

Currently, FreightWaves’ Outbound Tender Reject Index in SONAR (OTRI.USA) hovers around 4% as volume (OVTI.USA) continues to decline. That 4% rejection rate is lower than in 2019, the last true bad year for carriers, and most analysts believe this peak season will do little to balance the market in any meaningful way.

[Source: SONAR OTRI.USA in full year view]

Some more information on carriers and brokers

[Source: FreightWaves Research]

Each fleet size we surveyed chose the first quarter of 2023 as their most common expectation for the lowest spot rates, with the exception of those with 250-999 tractors. The most common response for that group was the second quarter of 2023.


The broker’s performance was slightly more indicative of divergent opinions depending on the size of the company. Like carriers, most brokers believe that the bottom will hit in the first quarter of 2023. But something interesting happens when the gross revenue of intermediaries increases: it becomes more likely that respondents believe the bottom is coming in the second quarter.

If there is a credible explanation for this, it could be that large brokers tend to be less exposed to the spot market, and therefore may be less in touch with the challenges smaller brokers are already facing.

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