It is natural for every trucker to strive for the highest efficiency and profitability, and we believe you are no exception. It is indeed important to be hardworking, constantly improve your skills, and optimize your management. On the other hand, there are phenomena in the freight market beyond your control. For example, these are fuel price fluctuations, weather conditions, or social occasions. They will inevitably affect your results, and the sooner you come to terms with it, the better. Moreover, you can even ally yourself with these factors by gaining enough knowledge! That’s why today we suggest learning about a crucial piece of data in the trucking business – load-to-truck ratio.

What is the load-to-truck ratio?

Load-to-truck ratio is the proportion of demand to supply. To be more specific, it displays the current number of loads that have to be shipped and the actual amount of trucks ready to pick the loads up. As with any other demand-supply law, it influences pricing and marks the industry trends. Although it sounds very simple, the load-to-truck ratio meaning may be misleading, especially for newcomers. Bear in mind that there is no general data point for the whole U.S. Yes, it can be theoretically counted, but it will not do you much good.

Functional load-to-truck ratios are calculated on separate load boards, in specific states, or even cities. Also, the metrics in the same area will differ significantly depending on the truck type. Usually, flatbeds are in the greatest demand while reefers are in the middle, and dry vans are characterized by the lowest ratio. Every little factor about available loads can be considered when inferring the current supply and demand curve. For instance, it can depend on whether the shippers look for single drivers or teams. In summary, the more niche features of the desirable load are taken into account, the more precise the load-to-truck ratio will turn out.

How to calculate the load-to-truck ratio?

Despite all the complicated nuances of the load-to-truck ratio, it is measured quite simply. We divide the total amount of available shipments by the truck post number. As we have mentioned above, we may apply various indicators like vehicle type to the operation. Make sure to apply them to both sides, so that you don’t divide all the kinds of loads by ready vans only, or vice versa.

The outcome can either be presented as a division (e.g. 3:1), or just as a single number like +3 in the case of ‘3:1’. Hence the load-to-truck ratio increases as long as there are many freights to be shipped compared to the truck quantity. Accordingly, the number drops if there are fewer loads than drivers willing to take them. Based on the live statistics, both shippers and carriers gauge their rates and decide what the fair middle ground is.

What is Considered a Good Load-To-Truck Ratio?

It is important to remember that there is no definite answer to the question. Again, it all depends on the logistics niche you are working in, your capacity, and your goals. If you operate a large fleet with different kinds of trailers, moving freight interstate and locally, then you need to do thorough load-to-truck ratio research regularly. However, it is quite simpler for an owner-operator who has already worked up their business pattern. You can be confident in your success if you count on professional dispatch like Logity that have load-to-truck ratios at their fingertips.

Nevertheless, a consensus exists among truckers that 2:1 is the starting point of a healthy load-to-truck ratio. Better if it goes up to 3:1, 4:1, and so on, but +2 would still be substantial for you to guarantee that you will likely book the next load promptly. 1:1 and lower values are thought of as ‘cold’ or’ tight’ ratios because they may present a challenge to find any load to ship, let alone a well-paid one.

By the way, here we have come to another tricky feature of the load to truck ratio you’ll want to know about. It is not simply the proportion of loads and trucks that plays a pivotal role, but also the load volume. It may seem that 100 loads by 25 trucks (=4:1) is more advantageous than 1000 loads by 500 trucks (=2:1), but this is not necessarily the case. A larger total digit of loads means more vibrant market dynamics in which you are likely to find loads faster and cater them specifically to your needs. When there are a few loads with even fewer trucks, chances are that the shippers and brokers would be more selective and meticulous before giving you the loads.

Why is the load-to-truck ratio important?

Professional truckers know well that monitoring load-to-truck ratio is the key way of maintaining the business. The correlation between demand and supply naturally determines the actual truck load rates. When the load-to-truck ratio is high, and the shippers need their loads out as soon as possible, it makes them compete over the trucks, and therefore offer attractive rates. On the contrary, low load-to-truck ratio forces competition between carriers who are forced to accept even ill-paid loads to avoid driving empty. Such circumstances allow shippers to reduce prices a little beyond a ‘justified’ level. That’s why keeping a keen eye on the metrics is principal when planning a route and deciding which area to send a truck to. It is often a better idea to choose a cheaper load that delivers to a place with a high load-to-truck ratio than deliver an expensive one to a spot from where you will not be able to get out for days.

Also, combined with other crucial factors such as fuel prices, the load-to-truck ratio launches new trends in the industry. It may seem too complex at first, but once you gain some experience in trucking, you will be able to project your next business strategy far further than just choosing a couple of the next loads. Learning about seasonal shifts of the load-to-truck ratio in different regions of the U.S. will help you decide which areas to cover in the nearest months, or the following year.

How Often Do Load-To-Truck Ratios Change?

Although there is no unified answer to this question, it becomes clearer when we scale the statistics to more specific criteria. It slightly swings monthly on the national level, but generally speaking, load-to-truck ratio is relatively stable concerning the whole country. The picture becomes more flexible once you take a look at, let’s say, the Northwest separately. You can notice that freight transportation activity grows brisker than usual before Christmas in the area. That is because Washington and Oregon are among the most coniferous-wooded states, and the demand for Christmas trees summons many truckers there.

The situation in particular cities, especially those that host major manufacturers, is so dynamic that it can fluctuate over a month several times. For instance, the cities of Detroit and Atlanta have an immensity of outbound freight requirements. There is a constant rapid flow of loads that should be traced daily to form an adequate load-to-truck ratio.

Where Can You Find Load-To-Truck Ratio Data?

Although load-to-truck ratio is a multi-layered concept comprising tons of information, you can fortunately access all the necessary statistics online nowadays. DAT load-to-truck ratio analysis is considered the most trustworthy in the industry. You can check out their weekly snapshot of loads’ volumes and availability for free. There you can track the actual ratios according to the vehicle types you operate. If you need more profound insights, you can utilize paid services like Freight Waves Sonar.

Conclusion

To wrap it up, the load-to-truck ratio is only at first glance an uncontrollable divine force. There is no denying that you can hardly influence the market circumstances, and it should be accepted as an axiom. However, having profound knowledge of the topic, you can gradually transform it into an effective tool. Basing your business strategy on the latest trends and predicting what is yet to come can enhance your success, build a reputation, and create more profit. If you are an enthusiastic owner-operator or a small trucking company owner, you can entrust the dispatch duty to a professional team of Logity Dispatch. We monitor the load-to-truck ratio tendencies and all the other factors that contribute to your success. Contact us and see for yourself!