Spot truckload loads see slight decline, reports DAT

Data recently issued by DAT Freight & Analytics, an online marketplace for spot market truckload freight, and the DAT iQ data analytics service, showed a slight increase in the number of available loads on the spot truckload freight market, for the week ending August 1.

DAT reported that the number of available loads on the spot truckload freight market increased 0.3%, and the number of available trucks, for the week, was off 1.2% on a sequential basis. The firm explained that while spot market truckload rates usually see a seasonal dip following the July 4 holiday, that was not the case this year, with rates remaining high throughout the month.

Driving those higher rates, it said, was demand out of Southern California, as well as other port markets, too. And it added that July volumes were down compared to June, which it said represents the busiest month on record, with the number of available van, refrigerated and flatbed loads on the DAT network down 17.1% while capacity was off 6.6%.

DAT highlighted some key data points, for the week ending August 1, including:

• the average van rate was $2.73 per mile, matching the average for July. In DAT’s top 100 van freight markets by volume, the number of loads moved increased 2.5%, for the week;
• Los Angeles to Chicago averaged $3.13 per mile for spot van freight and the number of loads moved soared 39.9% in the last four weeks. DAT said that the ongoing chassis trailer shortage has been exacerbated by higher-than-normal container dwell times for local container delivery and intermodal rail cars to move containers east. All of this is contributing to higher spot market truckload volumes off the West Coast as shippers struggle with reduced intermodal capacity on freight lanes to congested inland destinations;
• the number of reefer loads rose 4% last week while truck posts declined 1%, and the national average reefer load-to-truck ratio inched up from 12.8 to 13.5 last week and the national average spot reefer rate rose 1.7% to an average of $3.15 per mile (rates include a fuel surcharge); and
• the national average spot flatbed rate held at $3.00 per mile last week, 11 cents less than the July average. Flatbed load-post volumes fell 2% week over week and are now down 4% over the last month. Capacity tightened with an 8% decrease in equipment posts compared to the previous week, which pushed the flatbed load-to-truck ratio higher from 44.6 to 47.4

In a recent interview, DAT Chief of Analytics Ken Adamo told LM that there is a lot of typical seasonality present.

“We continue to see capacity not being able to keep up with demand,” he said. “That really is the story…and leading to these higher than seasonally typical conditions. Frankly, it is higher than what you would expect from a long-term trend perspective.”

Addressing contract truckload rates, Adamo explained that spot rates lead contract rates, in what he called a very pronounced relationship.

“It is a function of direction, duration (how long rates are up or down), and magnitude,” he said. “Spot rates have been up for a long time by a large amount so that almost necessarily brings up contract rates. Shippers are trying to move their freight back into the contract market. If you take the rate aspect out of it, they are trying to lower their freight transactions on the contract market and get their routing guides back in shape. The only way for that is for carriers to forgo the very hot spot market and go back to their old contract rates and entice them with increases in their contract rates, whether they are a common carrier or a main carrier in the routing guide.”

What’s more, for the better part of the last year, Adamo said that shippers have been putting in higher and higher contract rates, with the intent of enticing capacity back into the routing guide, which has largely failed, as spot market rates are still high and there has been no enticement back to the contract market.

“If the market is normally 85%-15%, for contract to spot and it goes to 80%-20%, five percent of a trillion dollars is a lot of money,” he said.