Coronavirus flattens Coyote’s truckload pricing curve

Coronavirus flattens Coyote’s truckload pricing curve

Spot US truckload rates have given up the gains of March and are still falling. Photo credit:

The impact of the coronavirus disease 2019 (COVID-19) is flattening the curve for a potential recovery in US spot market truckload rates, according to Coyote Logistics, a third-party transportation provider and the producer of the Coyote Curve forecast.

Expectations that pricing power would swing from shippers to truckers by mid-2020 are being revised, with a spot-rate surge and market swing now seen as more likely in 2021.

That would mean shippers currently struggling with shuttered operations and supply chains disrupted by the COVID-19 crisis will have to plan for price-related disruption next year, just as many economists predict the US economy will be hitting its post-pandemic stride.

“Basically, the [pricing] curve runs flattish with rates likely to chop around at plus or minus 5 percent through the recession over the next couple of quarters, then picks up its natural shape as the economy recovers in 2021,” with spot rates rising, Chris Pickett, chief strategy officer at the UPS freight brokerage subsidiary, told

That’s a less optimistic assessment than Coyote offered March 15, before a massive wave of business closings and stay-at-home orders led to an unprecedented economic shutdown. At that time, Pickett hoped the United States could avoid a recession in what he called “the glass-half-full scenario.” A month later, that glass is more than half empty, and the recession has already begun, according to IHS Markit, the parent company of

“Unfortunately, this downward spiral will continue until we make enough progress with containment efforts to flatten the US infection curve,” Pickett said in a blog post Friday. “Simultaneously, we will need to make sufficient progress in testing, treatment, and vaccine research. Only then will the currently shuttered sectors of the economy begin to safely re-open.”

Fuel price plunge temporarily aiding truckers

The plunge in oil and fuel prices this year — with West Texas crude prices dipping below $20 a barrel this week — may help prolong a period of weak truckload pricing, as diesel prices now in the range of $2.50 per gallon on average nationwide provide some cost relief to truckers struggling with rates Pickett says are approaching the point of unprofitability.

The lower fuel costs mean they’ll be able to sustain lower rates a bit longer. “There isn't much more room for rates to drop, but there isn't anything likely to drive them higher,” he said.

Current trends show dry-van spot truckload rates falling below 2017 levels by the middle of next week, according to load board operator DAT Solutions. “Dry van spot rates have given back their restocking-related gains from March and have actually fallen below 2019 levels,” Ken Adamo, chief analytics officer for DAT, said in a COVID-19 market update Wednesday.

“The downward trend shows no sign of slowing, but that could turn around quickly if there’s a strong volume push driven by produce in the tail end of April,” he said. The impact of produce season on spot truck capacity and rates in 2020 is unclear, however, with the loss of institutional food service business — suppliers for restaurants, catering businesses, and university and corporate cafeterias — collapsing the market for refrigerated truckload transportation.

“Supermarkets and big-box stores continue to re-stock inventory at an accelerated pace, but that no longer offsets the loss of the food service freight volume,” Adamo said.

In mid-April, spot market loads continue to decline, DAT Solutions said Friday, with the load-to-truck ratio on its load boards falling below 1.0 for the first time in three years, meaning there is less than one load available per truck in the spot market. “Capacity is flooding into the spot market, most likely due to lack of freight in the contract segment,” he said. 

DAT’s Ratecast forecasting model shows the decline in truckload pricing leveling off within a couple of weeks, based on historical data and seasonality. But the company notes the unprecedented and historic demand destruction caused by the COVID-19 pandemic could overwrite that forecast, pushing spot market rates down more sharply than expected.

Contact William B. Cassidy at and follow him on Twitter: @willbcassidy.