Transportation Social Media and Updates

Truck Spot Rates Stable; Fuel Adjustments Skew Perception

Trucking spot rates are not down, despite the data in the Bloomberg terminal suggesting that is the case. Traders are looking at a calculated linehaul rate, which takes gross (what brokers pay to carriers) and then subtracts fuel on a predetermined calculation. No one actually "pays" this rate, but is useful for tracking trucker cashflows. Truckstop, DAT, and SONAR all do this calculation manually because trucking spot transactions are almost always booked within a few days of pickup, so everyone assumes that both parties understand the current price of fuel. As fuel shoots up overnight, it is going to look like it obliterated rates, but that is meaningless. The market clearing rate stays the same (or goes up), but it looks like customers are paying far less for trucking services, which in reality, they are paying the same, just carriers weren't able to grab the increase fast enough and it hurts cashflows. The collapse in the Truckstop rate on the Terminal net fuel likely triggered the algos to sell off. We saw this happen before. A few years ago, Truckstop had a significant error in the fuel surcharge calcs, which created an algo sell off on Wall Street. It was corrected a few days later, but it revealed how much algo is tied to the Truckstop linehaul rate, net fuel. The solution (shamelss plug): High frequency rate data inside of SONAR, which provides both rates, gross (what people pay: NTI.USA) and linehaul net fuel (what we calculate carrier cashflows or linehaul, net of fuel: NTIL.USA). We also update our fuel costs daily (DTS.USA), capturing truckstop retail diesel prices), where others will only update it weekly using the DOE/EIA index. This gives you a far better understanding of carrier cashflows.