Morgan Stanley’s flatbed freight index indicates that flatbed capacity is tighter than normal for late July, and far tighter than was the case in the last two years in mid summer. The index is greater than all years except 2011 and 2014 over the last 8 years. In 2016, flatbed capacity was more readily available than was the case in 2015 until the last 6 weeks of the year, when the lines crossed. Flatbed capacity continued to tighten through the first half of 2017, but has leveled off over the last few weeks.
2016 was a year of unusual stability and remarkable excess capacity in the flatbed market. With the ELD mandate coming in December (and given that the market is already tighter than normal), it is possible that we will see significant tightening of flatbed capacity through the end of the year.
Flatbed capacity-demand balance favored the carriers over the shippers more so in 2014 than in the prior two years, but capacity never became as tight in 2014 as in 2010 and 2011. Low oil prices and a falloff in drilling activity meant that capacity never did tighten in 2015 or 2016. The index measures incremental demand for flatbed truckload services compared to incremental supply. The higher the index the tighter is capacity relative to demand when compared to a prior period.
Graph reproduced with permission from Morgan Stanley. *2006-2016 average trend line excludes financial crisis years of 2008 and 2009. For more information contact: Alex Vecchio at Alexander.Vecchio@morganstanley.com