Truckload spot market loads jump in October, reports DAT

Data recently issued by Portland, Oregon-based freight marketplace platform and information provider DAT, a subsidiary of Roper Technologies, for the month of October, in its DAT Truckload Volume Index, pointed to the highest number of spot market loads in any month going back to January 2015.

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. 

Shippers were active in advance of the holidays,” said Peggy Dorf, Market Analyst with DAT Solutions, in a statement. “And the low rates are effectively attracting more volume from contract carriers to spot transportation providers, especially during the busy season. “At this time last year, spot rates began to recede from record-high pricing. So year-over-year comparisons should become more favorable – or at least less negative – through the remainder of this year and into Q1.”

What’s more, DAT pointed out that there was enough available capacity to handle increased volume, coupled with truckload rates down in October compared to August.

DAT reported that even though spot van volume headed up 7.3% in October, there was a fair amount of capacity available, as national average spot van, refrigerated, and flatbed rates all seeing sequential declines.   

The firm also noted that the October van rate came in at $1.80 per mile, which included a fuel surcharge 5 cents lower than the September average and 28 cents below the October 2018 average. And it added that with holiday-related freight moving, there was what DAT called a rush of demand for trucks over the last few days of October which it said led to stronger pricing for carriers heading into November. 

Looking at different segments for October, DAT reported the following readings, including:

• October refrigerated (reefer) traffic was up 9.2% compared to September, due to apple and other fall harvests;
• the average reefer van rate, at $2.12 per mile, was down 4 cents compared to September and down 30 cents annually;
• flatbed loads were up 3.4% from September to October and were down slightly compared to peak demand in August;
• October flatbed rates, at $2.27 per mile, were off 3 cents from September to October and down 20 cents compared to October 2018

“Everyone is talking about a freight recession going on, but I don’t see a lot of evidence of that on the truckload side,” said Dorf in an interview. “Obviously, there are other modes that are suffering right now, but truckload seems pretty solid, at least according to ATA data that says volumes are up 4% through the first nine month of the year. We were moving along in the same direction with a little bit of a sharper incline, with each month this year being a growth month for volume of loads moved on the spot market load posts. Loads decline when it is easier for brokers and shippers to find trucks. If they can find trucks readily, then they don’t need to post as often. And their loads don’t need to be posted, and carriers will post trucks more when they are having a hard time finding loads, so they get exaggerated at the extremes. Both the denominator goes up and the numerator goes down, and so the load-to-truck ratio looks very low. It is below what we would call equilibrium level right now, so it favors the buying side. The people looking for trucks are having an easier time than the people who are looking for loads. That has been the pattern for most of this year.”

Looking at the next few weeks, Dorf said that demand is not likely to overwhelm capacity, because there has been a huge amount of capacity in the market this year, which is part of the cycle where carriers built up their fleets and spent a lot of money on equipment and driver retention.

But as time goes on, she said things like e-commerce and regular retail and a strong consumer market will result in demand at least coming up to a point where capacity may not be in the right place at the right time.

“There may be trucks, but they may not be positioned correctly so that causes rates to go up,” she said. “There is more of a mismatch or a disconnect in the market, and that means it is hard to find trucks…and it puts pressure on rates, especially in certain lanes that are more popular and tied to retail.”