June DAT Truckload Volume Index is mixed, across various segments

The June edition of the DAT Truckload Volume Index (TVI), which was issued this week by DAT Freight & Analytics represented a mixed bag, of sorts, with spot rates remaining firm, and contract rates falling to a nearly two-year low.

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.

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

• the Van TVI was down 1% compared to May, to 230, and down 10% annually;
• the reefer TVI was down 3% compared to May, to 167 and down 4.6% annually;
• the flatbed TVI increased 2% over May, to 267, down 1.2% annually
• the spot van rate rose $0.03, to $2.08 per mile, up for the first time in five months, with the spot reefer rate up $0.03, to $2.47 per mile, and the spot flatbed rate down $0.04, to $2.61 per mile;
• van line haul rates, at $1.65 per mile, rose $0.04 over May, with flatbed linehaul rates down $0.02, to $2.10 per mile, and reefer linehaul rates were up $0.05, to $2.01 per mile;
• driven by low diesel prices, fuel surcharges saw 17-month lows, with van freight at $0.43 per mile, reefer at $0.46 per mile, and flatbeds at $0.05 per mile; and
• the national average van load-to-truck ratio came in at 2.6, with 2.6 loads available for every van posted, down from May’s 3.9 and June 2022’s 3.9, the national reefer ratio, at 3.8, topped May’s 3.6 and trailed June 2022’s 7.0, and the flatbed ratio, at 9.7, trailed May’s 11.7 and June 2022’s 37.6

“The gap between spot and contract rates was the narrowest since April 2022,” said Ken Adamo, DAT Chief of Analytics, in a statement. “Spot rates for van and refrigerated freight increased for the third straight month, and volumes were almost unchanged from May. These are signs that spot truckload prices have reached the bottom of the current freight cycle. Demand for truckload services typically slows at this time of year, but this could change quickly given the threat of strikes in the parcel and less-than-truckload sectors. Shippers are putting contingency plans in place and would look to freight brokers and carriers on the spot market to keep their line haul operations moving. Demand for trucks would jump, especially around Louisville, Memphis, Indianapolis, Dallas and other major parcel hubs.”

In an interview with LM, Adamo said June was a decent month overall, with momentum being a bit later and more muted than expected, as the arrival of produce was later than usual, with the month ending as expected.

“That's really been the trend since we've seen that market shift to its down cycle a year-and-a- half ago basically,” he said. “But that's how the last retail peak was. It started a couple of weeks later, maybe even three or four weeks later than expected but then made-up ground as it progressed along. The real question is going to be how do we handle these next [six] weeks? And that's why I think a lot of folks in the industry are very interested in what's happening with Yellow and UPS, because these events catalyze shifts in the market. If you look at the ELDs and what happened with Hanjin a few years back remember, those types of things had everything spun up. So, what we think about is absent any major external disruption if, if we can hold on and if operating costs remain a little bit cheaper than they were to start the year and we can get to the fall, I think we could stem the bleeding, so to speak.”

What’s more, Adamo explained that from a carrier perspective, carrier profitability is improved, with the main issue now being volumes—in that volumes are catching up to rates, as even three months ago, brokers were moving less freight but at higher margins. He also observed that if the current cost structure and rate environment remain intact, it should translate into healthy volumes for the fall peak and get carriers through the quarter, which he described as good news.

“We could not have said that four months ago, when diesel was so expensive,” he said.