DAT Truckload Volume Index posts strong September gains

The September edition of the DAT Truckload Volume Index, which was issued this week by DAT Freight & analytics, an online marketplace for spot market truckload freight, picked up where August left off, posting all-time highs for spot market rates for van and refrigerated, or reefer, truckload freight.

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. Over all, the index increased up 6.1% from August to September and was up 13% annually.

DAT’s data found the following takeaways for September:

• the load-to-truck ratio for vans rose for the fifth straight month, to 5.5, up 3.8% compared to August and more than doubling the reading on an annual basis;
• the national spot van rate average—at $2.37—was up 15 cents over August and up 53 cents compared to September 2019;
• the average spot line-haul rate for vans (the total minus fuel surcharges), at $2.18, marked the highest monthly national average on record, for the second straight month and surpassed the national monthly average contract rate for the second straight month, too
• spot reefer volumes dropped for the third consecutive month, falling 1.3% compared to August, with the national reefer load-to-truck ratio, at 9.7, more than five times higher than the all-time low in April, at 1.7;
• the national average spot reefer rate, at $2.57 per mile, was up 13 cents compared to August and up 41 cents annually;
• the national flatbed load-to-truck ratio, for September, at 40.3, hit its highest level since June 2018; and
• September flatbed volumes rose 2.8% over August and were down 8% annually; and
• the national average spot flatbed rate, at $2.41 per mile, fell 11 cents compared to August and rose 22 cents annually

“We’re seeing strong volumes across equipment types as the economy continues to recover, particularly in areas related to consumer spending. It’s good news for retail, but the industrial and energy sectors are still seeing a dip in volumes,” said Ken Adamo, Chief of Analytics at DAT, in a statement. “Spot market rates just keep climbing as companies turn to the spot market to help them manage imbalances in their supply chains.”

DAT highlighted various market themes in its freight outlook, which were featured in the Truckload Volume Index.

One key theme focused the holiday shopping season, with DAT explaining things will look different in 2020, with major retailers starting earlier and lengthening their deals to accommodate shifting demand from consumers. DAT noted that the holiday season includes Halloween, Thanksgiving, Black Friday, Small Business Saturday, Cyber Monday, Super Saturday and Christmas, which it added are all events that typically create higher demand from truckers to haul freight.

And another one addressed the accelerated inventory build-ups, which DAT said adds another dimension to a disjointed freight market, with manufacturers working to avoid inventory failures akin to the ones experienced in March, during the onset of the COVID-19 pandemic.

In a recent interview, Adamo said that when comparing the current state of spot market rates and volumes, from early May when truckers were protesting in front of the White House, with rates hovering around $1.20-to-$1.30 per mile nationally (excluding fuel), to now, there has been what he called a pure linear run to historic five-to-ten year historic highs on the spot market for dry van. And he added that it is probably a little bit lower on the reefer side, due to seasonal components, and that many restaurants across the country are not operating at full capacity, coupled with the lack of food service demand at schools, universities, and sporting events, among others.

“But on the flatbed side, we are seeing continued growth, largely due to favorable home building conditions and home deliveries related to that, including roll-on roll-off cargo, at some of the Eastern ports,” he said. “It is really just bullish all around from a spot rate perspective. We are starting to see that bleed into contract rates as well. Spot rates are definitely above contract rates right now, to the extent that things were during the peak in 2018. We are seeing contract rates pick up a tiny bit, which I think is due to two primary factors. One is routing guide slippage. Carriers are lower in the routing guide for a reason, which is because they are priced higher, and if you tap into those carriers you have to pay more. Another factor is shippers offering voluntarily to pay higher prices to ensure their contract carriers are going to meet their commitments.”