DAT Truckload Volume Index hits new records in March

One record month was followed by another in the most recent edition of the DAT Truckload Volume Index, which was recently issued by DAT Freight & analytics, an online marketplace for spot market 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. Overall, the index headed up 31%, from February to March. This marked its highest level going back to when the Index was rebalanced in January 2015, topping September 2020, a period when shippers were gearing up for holiday shipping and positioning freight. 

DAT reported that spot truckload van and refrigerated freight rates posted all-time highs in March, adding that flatbed demand, which was paced by strong construction and manufacturing output headed into what it called record territory.

DAT also noted that the total number of loads posted on the DAT network saw a 22.3% gain, from February to March, and the number of available trucks increased 30.9%, well ahead of February, which was impacted by harsh winter weather.

DAT’s data found the following takeaways for truckload volumes, load-to-truck ratios, and rates in March:

• the national average spot truckload van rate, at $2.67, was up 13 cents compared to February and up nearly 30 cents than the previous high in December 2020;
• the national average spot reefer rate, at $2.95 per mile, was up 25 cents compared to February and was 20 cents higher than the monthly average contract rate;
• the national average load-to-truck ratio, at 12.2, was off compared to February’s 15.9;
• spot flatbed truckload rates and load-to-truck ratios hit their highest respective levels going back to mid-2018;
• the national average flatbed load-to-truck ratio was at 83.7 in March, with spot flatbed volumes up 34% sequentially, due to improved manufacturing, the strength of the single-family housing market, and seasonal construction activity;
• the national average spot flatbed rate, at $2.78 per mile, was 20 cents higher than February; and
• the contract reefer rate was $2.75 a mile, 20 cents less than the spot reefer rate (DAT said that when spot rates exceed contract rates, truckload carriers typically shift capacity to the spot market, creating uncertainty for shippers.)

And it also observed that annual comparisons of truckload rates and volumes are “less relevant,” due to the impact of the pandemic on supply chains.

What’s more it said that rates could crest late in the second quarter, for various reasons, including: federal stimulus checks, a buildup of household savings, component shortages in manufacturing, intermodal network constraints and surcharges, low inventories, and supply chain disruptions at ports, canals and elsewhere.

“The strength of truckload freight relative to the amount of capacity available in the market, combined with the willingness of shippers to pay high rates, indicates an urgency from businesses to fill orders and meet delivery schedules after a difficult February,” said Ken Adamo, Chief of Analytics at DAT, in a statement. “All three equipment types that make up our Truckload Volume Index showed extraordinary growth at a time when capacity is tight and truckload prices are up.”

Earlier this year, Adamo said in an interview that  the market entered the year coming off of very a strong retail shopping season, with rates coming down faster than had been seen for that period, to start the new year, over the last four or five years.

“I truly think that absent any weather event we had that rates would have continued to fall a bit and then level off, in line with where rates were in between 2018-2019,” he said. “That is my most likely guess. What we essentially saw was a very fragile freight system across really all domestic modes, it disrupted a giant freight triangle from Seattle to southern Texas to New England. And that drove end-to-end disruption from the ports, with unloading and drayage, moving to rail, then over-the-road. Less-than-truckload (LTL) struggled to pick up the slack and we saw terminal closures. We also saw huge swaths of the country with traffic limitations that were impeding truckers’ hours…and not only terminals but also customers shipping and receiving locations being impacted.”

And, when asked about how the first quarter was, he said it could rival the first quarter of 2020, noting that the pricing decisions that are being made today need to heavily contemplate the third and fourth quarters of this year and the first half of next year.

“There was a lot of contract rate activity in the second half, specifically the fourth quarter of last year that spilled into January and early February of this year,” he said. “That was a wave and between every wave there is this quiet time. And I think when you start to see that pickup of RFP activity in the spring, the best advice I can give is to not let that recency bias affect too much of what you are feeling. We will get through this and will get past this and, ultimately, we are going to have a second half of this year to be concerned with and all of 2022 to start thinking about.”