Flatbed Report: Demand drops as lumber prices fall – DAT Freight & Analytics

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The housing business is among the first to react to the continuous Federal Reserve rate of interest hikes. The low-interest mortgage charges of the previous years have fueled an imbalance within the demand and provide of the housing market. Home costs have risen 17.5% y/y in March 2022. The lumber business has been the primary to expertise the results of the excessive demand and softening of the housing market. 

Lumber commodity costs hit the 2nd all-time excessive in February at $1,216 per thousand board/ft and now have been practically reduce in half and are displaying costs at $640. 

“Inflation pressures have led to rising rates of interest and a slowing of housing begins, and lumber consumers have…began to gradual their orders,” says Scott Reaves, director of forest operations at Area Timber Advisors. Lumber costs have fallen from the “excessive ranges seen all through the pandemic,” however they continue to be considerably larger than ranges seen earlier than the pandemic, says Reaves. Whereas the truth is that whereas single-family housing demand is slowing, there’s nonetheless a “super quantity of enterprise within the pipeline, and plenty of builders have [three to five] months of stable backlog as they try to complete tasks which might be already in play,” stated Steve Loebner, director of threat administration at Sherwood Lumber. So, “we’re confronted with a market that’s step by step slowing total, however on no account falling off a cliff,” says Loebner.

Transportation points have additionally lessened for the lumber business, in response to Michael Wisnefski, CEO of MaterialsXchange. “Transportation has loosened up; the product is transferring. Lumber by no means actually had a manufacturing difficulty. The place they did have a difficulty was transferring the product from the manufacturing facility to the market.” Proof of this may also be discovered within the flatbed market, the place spot linehaul charges have declined by $0.21 per mile because the starting of 2022.

All charges cited beneath exclude gasoline surcharges except in any other case famous.

Flatbed capability tightened in Seattle final week following a surge in load put up volumes, which elevated by 35% w/w. Outbound spot charges had been additionally up, rising by $0.12/mile to a mean of $2.48/mile. Hundreds to Reno, 750 miles to the south, had been up barely to a mean of $2.32/mile and, regardless of dropping for the prior 4 months, at the moment are $0.06/mile larger than the earlier 12 months. 

Following the 12% m/m improve in June, Houston import volumes at the moment are up 20% y/y pushing extra hundreds into the flatbed spot market, which was up 32% final week. After tightening the prior week quickly, capability eased the earlier week following a $0.14/mile lower to a mean of $2.87/mile. On the short-haul lane north to Ft. Price, spot charges dropped by $0.32/mile beneath the June common to $3.58/mile final week. That’s nonetheless $0.28/mile larger than the earlier 12 months on DAT’s primary flatbed lane within the spot market. Within the manufacturing middle of Massachusetts in Springfield, capability was tight final week following a 62% surge in load posts leading to outbound spot charges leaping by 34% to a mean of $2.68/mile.  

Flatbed load posts (LP) are virtually an identical to mid-July 2018, following final week’s 12% w/w improve. Like dry van and reefer, the flatbed spot market is seeing capability loosened quickly after the earlier week’s 29% w/w improve in carriers posting their tools for hundreds. Whereas tools put up ranges are additionally at file highs for this time of the 12 months, they’re lower than one p.c beneath the very best ever recorded degree in late 2019. On account of a lot larger tools posts final week, the flatbed load-to-truck (LTR) ratio decreased to 23.27.

As the warmth goes out of the flatbed spot market, linehaul charges at the moment are down for seven weeks in succession following final week’s $0.02/mile lower. Spot charges have dropped $0.09/mile within the earlier month and $0.18/mile because the begin of the 12 months however stay $0.08/mile larger than in 2018. In comparison with prior non-pandemic years, flatbed linehaul charges are $0.45/mile larger. 

Learn the total weekly market replace.

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