A flurry of mixed themes were highlighted in the most recent edition of the DAT North American Freight Index issued this week by DAT, a subsidiary of Roper Industries.
While total freight volume in February saw a 48 percent increase in February, following a seasonally-slow January, the index itself was down 13 percent, while spot truckload rates eased up from January to February, due to increased capacity from contract carriers lowering spot van and refrigerated freight rates, according to DAT. DAT defines the North American Freight Index as a measure of conditions on the spot truckload freight market.
For rates and demand in February, DAT reported the following:
“Volume on the spot market in February was robust for what is traditionally a slow month for freight,” said Don Thornton, Senior Vice President, DAT Solutions, which operates the industry’s largest on-demand freight exchange for spot truckload freight. “The strong freight volumes attracted an unusual number of contract carriers, and the added capacity helped keep rates down on many high-traffic van and reefer lanes until late in February, when national average contract rates began to firm up.”
In a recent interview with LM, DAT Industry Analyst Mark Montague explained that the current stretch of gains in spot market activity, prior to January’s decline, 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.