DAT Truckload Volume Index trends down to more seasonal patterns in July

The July recent edition of the DAT Truckload Volume Index (TVI), which was issued this week by DAT Freight & Analytics, pointed to a downshifting for both truckload freight volumes and pricing.

The DAT Truckload Volume Index reflects the change in the number of loads with a pickup date during that month, with the actual index number normalized each month to accommodate any new data sources without distortion, with a baseline of 100 equal to the number of loads moved in January 2015. It measures dry van, refrigerated (reefer), and flatbed trucks moved by truckload carriers.

July’s TVI dry van freight reading—at 201—fell 20% compared to June (down 17% annually and flat compared to July 2020), with the refrigerated TVI—at 133—off 12.5%, for the same period (down 7.1% annually and down 1.9% compared to July 2020), and the flatbed TVI down 15.9%, to 217 (up 13.6% annually and up 16% compared to July 2020). DAT said that changes in the TVI represent the number of loads moved with a pickup date during the month.

DAT’s data highlighted the following takeaways for truckload volumes, load-to-truck ratios, and rates, for the month of July, including:

• the average rate for van freight under contract fell $0.08, to $3.21 per mile, coming off a record high, of $3.29 per mile, in June (this rate had risen $1.15 going back to January 2020);
• the national average reefer contract rate was down $0.06, to $3.50 per mile;
• the national average flatbed rate dipped $0.08, to $3.83 per mile, falling short of the record-high set in June, at $3.90 per mile;
• the national average spot market van rate fell $0.05, to $2.63 per mile;
• the national average spot reefer rate, at $2.99 per mile, fell $0.06 and came in below the $3 poer gallon mark for the first time since April 2021;
• the national average flatbed rate, at $3.29 per mile, was down $0.17, coming off of a record high of $3.46 per mile in June (DAT defines spot rates as those negotiated by the carrier and freight broker as one-time transactions);
• the total number of loads posted to the DAT One load board network was down 26%, from June to July, and up 34% annually, with the number of trucks on the network down 9.3%, for that period, while increasing 8.1% annually; and
• the national average van load-to-truck ratio dipped from 3.9 in June to 3.8 in July, with the reefer ratio up from 7.0 in June to 7.2 in July, and the flatbed ratio down from 37.6 in June to 21.8 in July, following a 63.3 to 37.6 May to June decline

“Demand for van and reefer services softened predictably in July and freight volumes generally settled to levels seen in July 2020 and 2019,” said Ken Adamo, DAT Chief of Analytics, in a statement. “After several years of volatility, truckload volumes for van and reefer freight followed a more typical summertime pattern.”

DAT Principal Analyst Dean Croke told LM in a recent interview that June’s TVI data showed that contract rates have peaked and started to decrease, with the new rates coming in are coming in at a lower rate now, more so in reefer.

“And what that means is overall all active rates in routing guides will start to decrease slowly, which is exactly what happens when spot rates fall as they have. It puts a drag on contract rates eventually. That is a pretty big news story in and of itself, because we had six-to-eight quarters of fairly significant rate increases on the shipper side and this is the first time that has started to back off….and we have seen a lot of shippers re-bid lanes, which is pretty typical of this sort of market cycle, when capacity loosens.”

What’s more, Croke added that the difference this time is a lot of those small low-volume lanes shippers are letting go to the spot market—rather than put into a tender—and they are really focusing on their core lanes. And he added that anecdotally, around 80% of shipper volume runs in 10% of their lanes in general.

“If you are putting out a bid, a lot of people put out 100% of their lanes and tie up carrier time and time trying to get RFPs done,” he said. “That is big picture there but when you look at some of the broader economic indicators, like the ATA’s monthly Truck Tonnage Index and the U.S. Bank Freight Index, they are up annually and even a little bit better than 2018. Our takeaway from the spot and contract market is demand looks a lot like 2018 did, or slightly better, but explaining the decline in rates on the linehaul side when you take out fuel, there is a lot of capacity…and that capacity when you look at load post volumes is almost identical to 2019, which was a bad year for carriers.”