Data recently issued by DAT Freight & Analytics, an online marketplace for spot market truckload freight, and the DAT iQ data analytics service, showed a slight increase in the number of available loads on the spot truckload freight market, for the week ending August 1.
DAT reported that the number of available loads on the spot truckload freight market increased 0.3%, and the number of available trucks, for the week, was off 1.2% on a sequential basis. The firm explained that while spot market truckload rates usually see a seasonal dip following the July 4 holiday, that was not the case this year, with rates remaining high throughout the month.
Driving those higher rates, it said, was demand out of Southern California, as well as other port markets, too. And it added that July volumes were down compared to June, which it said represents the busiest month on record, with the number of available van, refrigerated and flatbed loads on the DAT network down 17.1% while capacity was off 6.6%.
DAT highlighted some key data points, for the week ending August 1, including:
In a recent interview, DAT Chief of Analytics Ken Adamo told LM that there is a lot of typical seasonality present.
“We continue to see capacity not being able to keep up with demand,” he said. “That really is the story…and leading to these higher than seasonally typical conditions. Frankly, it is higher than what you would expect from a long-term trend perspective.”
Addressing contract truckload rates, Adamo explained that spot rates lead contract rates, in what he called a very pronounced relationship.
“It is a function of direction, duration (how long rates are up or down), and magnitude,” he said. “Spot rates have been up for a long time by a large amount so that almost necessarily brings up contract rates. Shippers are trying to move their freight back into the contract market. If you take the rate aspect out of it, they are trying to lower their freight transactions on the contract market and get their routing guides back in shape. The only way for that is for carriers to forgo the very hot spot market and go back to their old contract rates and entice them with increases in their contract rates, whether they are a common carrier or a main carrier in the routing guide.”
What’s more, for the better part of the last year, Adamo said that shippers have been putting in higher and higher contract rates, with the intent of enticing capacity back into the routing guide, which has largely failed, as spot market rates are still high and there has been no enticement back to the contract market.
“If the market is normally 85%-15%, for contract to spot and it goes to 80%-20%, five percent of a trillion dollars is a lot of money,” he said.