December saw a strong finish to 2016, with spot truckload freight activity and volume having a strong month, according to data issued by DAT, a subsidiary of Roper Industries.
The company’s North American Freight Index was up 8 percent in December, marking the sixth straight month of volume gains. DAT attributed strong momentum for e-commerce and grocery shipments as the main growth drivers for December, a month that is typically quiet for the spot market. DAT defines the North American Freight Index as a measure of conditions on the spot truckload freight market.
DAT said van freight availability jumped 10 percent from November to December, while posting a 52 percent annual gain in December, which represented an average van load-to-truck ratio, which measures the number of available of loads for each truck posted on the DAT load board network, of 3 to 8, representing a 22 percent gain from November to December and an 80 percent annual gain.
On the rate side, DAT reported that the national average spot truckload rate for vans was $1.73 per mile, including a fuel surcharge, with this marking the highest average rate for 2016 as it was up 7 cents compared to November and up 1 cent annually.
“Van rates and volumes shot up in places like Memphis and Columbus, both associated with e-commerce fulfillment, and even Denver and Seattle exhibited unusually robust rates and shipping patterns,” said Mark Montague, DAT industry analyst, in a statement.
December reefer freight availability was up 10 percent compared to November, due mainly to increased demand for fresh and frozen foods over the holidays, with the reefer load-to-truck ration of 8 to 2 marking the highest monthly ratio over the last 21 months. Reefer volume in December was up 55 percent annually. And the national average spot market rate for reefers at $1.98 per mile was up 2 cents over November, matching June’s peak season average, and was up 2 cents compared to December 2015.
Other notable stats from DAT included:
In a recent interview with LM, DAT’s Montague explained that the current stretch of gains in spot market activity needs to be place in somewhat historical context.
“We went through a period where 2014 was a record year for the spot market and rates climbed very steeply for both spot market and contract rates,” he said. “And in 2015 there was still momentum in contract rates, but spot market rates started to lose some of their steam and spot rates started to slide into the first quarter of this year, hitting bottom in March and April. There was then a recovery of rates after, as well as a recovery of volumes and the indicators in the load-to-truck ratio turned positive.”
While things are getting better in the market, Montague made it clear that the growth is not accelerating at such a quick clip that every stakeholder is unanimously on board with the improvement. And he explained that while there may be a “little bit less” capacity out there, there is still “sufficient” capacity in most situations and regions of the U.S.