As shippers persist in strategizing when and how to engage the truckload market, the Rockfarm cost-per-mile index consistently illustrates available truck capacity. This month, truckload rates persist in following the trend line that commenced in February 2022, demonstrating a cost-per-mile rate of $2.52. A significant contributing factor to the cost per mile in May was the fuel surcharge, which experienced its largest decrease to $3.88 per gallon. Notably, this marks a drop of 20 cents per gallon compared to April’s average cost of $4.08.
Speaking of fuel costs, there is an emerging divergence among regional fuel averages. While the cost of diesel remains at $4.81 in California, the Gulf Coast and Midwest regions are experiencing averages of $3.55 and $3.78 per gallon, respectively.
Considering the pre-Covid rate per mile trend as an indicator, it suggests that there is still ground to cover before rates stabilize. Over the past seven years, truckload rates reached a peak of $3.94 in February 2022. Since then, truckload rates have continued to decline, along with the cost of diesel.
This declining trend in rates has prompted shippers to adapt their truckload rate strategies. They are maintaining the utilization of spot market rate processes developed during Covid, and they have made adjustments to their RFP (Request for Proposal) processes. These adjustments include award flexibility to retain ownership in their contract-spot rate percentage, as well as modifications to timelines for recurring RFPs.
The ultimate outcome? The rate bottom is drawing closer, indicating a potential stabilization in the near future.
Brad’s journey into logistics began as a Marine Officer and transitioned from the LTL docks to the non-asset side within the logistics service provider arena. As a co-founder of Rockfarm, Brad drives our business development efforts and delivery of our promise. An Arizona native, Brad enjoys spending time outdoors in his home state with his wife and family.
“Our approach to the market allowed us an opportunity to push forward in 2008 and enable our mission, lower the cost to serve to stand as a cornerstone to our company today.”