Following January, which saw mixed results for truckload freight volumes and national average spot rates, the February edition of the DAT Truckload Volume Index, which was recently issued by DAT Freight & analytics, an online marketplace for spot market truckload freight, saw record results on a few different fronts, mixed in with some declines, due to the impact of harsh winter weather on freight flows in the form of distressed supply chains and disrupted transit times.
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 decreased 9.8% from January to February.
DAT also observed that intermodal network disruptions in February, coupled with record-level spot volumes, translated into more freight hitting the spot market, with shippers needing to meet customers’ delivery deadlines.
“The scope of the weather system and impact on people and infrastructure at once constricted freight volumes and made it more expensive to move goods long distances over the road,” said Ken Adamo, Chief of Analytics at DAT, in a statement. “After a decline in January and early February, pricing unexpectedly shot back up to post-holiday levels and strained fragile supply chains.”
In a recent interview with LM, Adamo explained how significant a role that the harsh winter weather played in the February data.
“We entered the year coming off of very a strong retail shopping season, with rates coming down faster than we had seen for that period, to start the new year, over the last four or five years,” he said. “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. 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 is shaping up, he said it is going to rival the first quarter of 2020 at this point, 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.”