DAT reports holiday drop-off in spot load posts

While holiday shopping activity continues to accelerate in the remaining days up to Christmas, spot market activity has not followed the same path, based on data published this week by Portland, Oregon-based freight marketplace platform and information provider DAT, a subsidiary of Roper Technologies.

DAT reported in its Weekly Spot Freight Brief, for the week of December 8-15 that the number of available loads on the spot truckload freight market was down 4.6% for the week, which, DAT said, “runs counter” to the more typical seasonal uptick for trucking demand.

This was also true for national average load-to-truck ratios, which DAT said is a measure of demand for available truckload capacity, with the ratio for vans and flatbeds down for the week, as well as dips in spot rates for: vans at $2.08/mile, wiping out a 6-cent gain the previous week, flatbed, down 1 cent to $2.42/mile; and reefer, down 4 cents to $2.42/mile.

While the national average van rate was down, DAT said that the linehaul, or “demand” component, has shown gains in recent weeks, which serves as a sign of the impact of falling diesel prices on rates at the moment.

This most recent batch of weekly data from DAT is in sync with its DAT North American Freight Index for November, which DAT defines as a monthly measure of demand for spot market freight.

This index showed that spot market freight and volume rates dropped in November for most equipment types, with November volume down 2.5% compared to October and down 24% annually compared to an extremely busy November 2017. November rates for vans were stable, and flatbed rates fell 7 cents, which DAT said was in line with typical seasonal patterns.

Mark Montague, DAT senior analyst, said in an interview that when looking at the spot market for 2018 there has been an increase in contract demand rates annually, which is far from the norm.

“There were really two spot market peaks for the year, one in January that was unexpected, as the first quarter is usually a period of softer rates for the spot market, and then in June, which is more common and was even more of a peak than what happened in January,” he said. “It looks like there has been some learning curve reached as far as ELD.”

Montague noted that current behavior related to e-commerce activity and holiday season shipping demand that often leads to rate gains, as opposed to rates trending down during non-holiday or seasonally-influenced periods, band together for future trends in that put things in rough equilibrium for a more normal year in 2019.

“If you look at what happened in 2018 on contract rates, there was an increase, on average, around 15%,” he said. “But the prior two years, there was a period there where rates did not go up at all and actually fell on the contract side. When that 15% increase per van came, it was like carriers were catching up from prior years.”

In terms of how spot market activity impacts the contract marketplace, Montague said there are some months more impacted by seasonality than others, and he added that the current uncertainty about trade has caused some hesitation for capital spending and budgeting for the first quarter of 2019. And he said that based on data generated by DAT’s data intelligence group, there are indications that first quarter activity could be substandard, or soft, in the freight marketplace. 

“That might give a false sense of confidence to shippers, but they need to be paying close attention to carriers and improve relationships,” he said. “We don’t want to plan for a 0-to-3% type of year and then have another surprise. I think contract rates and renewals will be OK for carriers in the first quarter even though the spot market indicates weakness, with a rebound in the second quarter.”