Flatbeds Fumble with Housing

The flatbed market is the third smallest of the major modes outside the dry van and refrigerated unit (reefer). Unlike van or reefers, there’s also high variation in type of flatbed trailer. Most common is the 48 footer. A flat open deck that is more bowed when empty. The flat part arrives as the deck bears up to 48,000 pounds.

Other variations have better clearance, protection, or payload capacity depending upon need. A flatbed is a freight tostada whereas the van is a burrito. Each have their own trade-offs in fill and spill potential. Most retail and food items cannot be exposed to the elements, so freight for flatbeds is concentrated in the stuff that can sit outside - construction materials, oil & gas pipes, landscaping material and on.

The work isn’t for the feint of heart making it demand a premium, especially the more specialized you get. The variability of work and capacity pool make it most sensitive to ratios and load tender rejections. Van capacity measures usually live in single digits while flatbed rejections peaked at 44% in early 2022. DAT’s L:T measures finally fell from 100+ load to truck posts at the same time.

Those ratios are now back below their 5yr average per DAT’s multi-year trend. FreightWaves’ Thomas Wasson mentions rejections have collapsed after the fourth to a low 6%, lower than reefer, and just above van. Seasonality is usually a bit different from the other two as well. And in the latest cycle, it has been thrown off by a neurotic housing market to which its anchored. Notice the white and blue lines below reaching their highs with pandemic era goods bloat while flatbed popped a year later once the Fed hammer came down.

Now, as the Fed contemplate cuts this month or wait it out for certainty in September, there’s indication short term pain for the mode as buyers exhaust over 7% mortgage rates. The latest CPI prints have softened spreads some with the 10YR, bringing it down, but activity tends to fall this time of year as sales slow into the Fall.

Starts were hopeful earlier in the year, raising flatbed rejections back past 15%, yet weakness in single family starts, sales and accompanying industries is clobbering the mode yet again as van segments speak of green shoots.