Navigating Growth in the Flatbed Sector: Insights from Gary's Steel Mills
Introduction: In the dynamic arena of flatbed transportation, certain regions stand out for their substantial contributions. One such area is the southern coast of Lake Michigan, home to one of North America's most significant integrated steel mills. This mill is not only a cornerstone in the industry but also a vital source of freight for flatbed carriers.
The Heart of Steel Production: Gary Works Located in Gary, Indiana, along Lake Michigan’s shores, Gary Works has long been a pivotal player in the steel industry. Once recognized as the largest steel mill globally, it boasts a remarkable raw steel production capacity of 7.5 million net tons. This single mill’s output translates to around 250,000 yearly loads for flatbed carriers. Indiana is a powerhouse in steel production, contributing about a quarter of the annual U.S. total, with 21.1 million tons in 2022. The Gary and South Bend areas are particularly noteworthy, accounting for 70% of the state's outbound flatbed loads.
Scott Paul, the president of the Alliance for American Manufacturing, notes the potential for growth in U.S. mills, which typically run at approximately 76-77% capacity. This capacity suggests a substantial opportunity to increase production domestically without relying heavily on imports.
Market Trends in Indiana’s Flatbed Sector The Indiana flatbed spot market, particularly in the Gary/South Bend areas, has seen a remarkable surge in activity in 2023. This year, load movement in these markets increased by 33% compared to the last five years. Despite this growth, outbound flatbed spot rates have remained steady at $2.62/mile. Regional loads to cities like Cleveland and Columbus have seen slightly different rates, while long-haul routes to places like Omaha have their own pricing dynamics.
The overall strength in the flatbed market last week was most prominent in the Southeast Region, with linehaul rates climbing marginally but significantly, reflecting a larger volume of load postings.
Load and Equipment Posting Trends The past week saw a 35% increase in flatbed load postings, a notable rise, yet still behind the figures from 2020 and the previous year. Equipment postings nearly doubled, indicating a resurgence of carriers hitting the roads. This change has influenced the flatbed load-to-truck ratio, which concluded the second week at 8.51.
Linehaul Rate Variations Contrary to typical trends, flatbed linehaul rates experienced an increase last week, reaching a national average of $1.99/mile. This rate, while lower compared to the same week last year, shows a significant rebound from 2020, reflecting the market's ongoing adjustments since that year’s oversupply.
Conclusion: The flatbed market, especially in regions like Gary, Indiana, is a bellwether for the freight industry. With its robust steel production and evolving market rates, it offers a unique perspective on the health and trends of the national freight market. For carriers and freight dispatchers, staying informed about these trends is crucial for navigating the dynamic world of flatbed transportation efficiently and profitably.
Acknowledgement: This analysis is based on data and insights from DAT, a trusted source in freight analytics. For more detailed information, visit their original blog post: DAT's Flatbed Report.