As has been the case with myriad facets of the economy, which are suffering and seeing new lows, due to the COVID-19 pandemic, truckload freight volumes were not an exception, according to data issued this week by Portland, Oregon-based freight marketplace platform and information provider DAT, a subsidiary of Roper Technologies.
DAT said that its DAT Truckload Volume Index, which 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, fell 19% from March to April and was off 8% annually.
“With so many businesses closed or operating at low capacity, truckload shipments have plunged, which put spot rates in dangerously low territory for owner-operators and small carriers,” said Ken Adamo, Chief of Analytics at DAT, in a statement. “Some carriers parked their trucks to wait for better business conditions, but there’s still lots of available capacity as a result of the low volumes, which has kept rates down.”
April's decline did not come unexpected, as Adamo recently said that based on DAT’s truckload pricing data and predictive models, it anticipated further downward pressure on dry van rates through the summer unless more certainty returns to the economy.
In a recent interview, Adamo explained that 2020 is kind of closely following 2017 as a way for DAT to model things off of a prior year, adding that in recent weeks things have fundamentally decoupled from 2017 and shot upward.
“The differences between 2017 and 2018, are with 2018 arguably being the high water mark of the decade,” he said. “We are not there yet, but we are maybe halfway there. What we are seeing is that will mainly be driven by load volume. The working thesis is that capacity has not left the market but is being sucked up by large contract truckload shippers and are not using the spot market.”
DAT’s data found the following takeaways for April:
DAT officials said that based on forecasts April may represent the bottom for the spot market, adding that, based on predictive metrics from the DAT iQ Ratecast and Market Conditions Index, “anticipate higher prices and volumes as states relax their stay-at-home orders, produce season begins and port markets like Los Angeles, Houston, Savannah, Ga, and Elizabeth, N.J. see more traffic. “
DAT’s Adamo noted that carriers will not be able to sustain operations long at current levels, with spring produce shipping expected to offer some relief and also put upward pressure on May prices.