DAT points to July spot market gains in July Truckload Volume Index

The July edition of the DAT Truckload Volume Index, which was issued this week by DAT Freight & Analytics, a subsidiary of Roper Technologies and operator of an online marketplace for spot market truckload freight, pointed to gains, at a time when market conditions and freight demand remain impacted by the ongoing COVID-19 pandemic.

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 headed up 2.1% from June to July and was up 3.7% annually. 

DAT’s data found the following takeaways for July:

• the load-to-truck ratio for vans rose for the third straight month, to 4.4, up 25% from June, and more than doubling the 2.1 ratio from July 2019, showing a market “with more freight than trucks on the DAT One load board network,” according to DAT;
• the national spot van rate average—at $2.03—was up 23 cents over June and up 19 cents compared to July 2019;
• spot reefer volumes were up less than 1% from June to July, with the national reefer load-to-truck ratio, at 7.4, four times higher than the all-time low in April, at 1.7;
• the national average reefer spot rate—at $2.30 per mile—was up 15 cents, from June to July, and up 11 cents annually;
• July flatbed volume was steady compared to June’s, 24.8, which marked the highest tally since July 2018, and was off 6.6% annually; and
• the national average flatbed spot rate—at $2.20 per mile—was up 13 cents compared to June

“States are reopening at different rates and are being hit by the virus at different times. This is leading to unseasonal peaks and valleys in manufacturing output and consumer demand,” said Ken Adamo, Chief of Analytics at DAT, in a statement. “Carrier networks are out of balance due to inconsistent freight demand at a commodity and lane level, and this is leading to a spike in demand for spot freight in order to meet the capacity need.” 

Looking ahead, DAT said that national van and reefer spot rates are pegged to rise through the end of August. It described flatbed rates as uncertain in August, with carriers expecting ongoing demand in construction. And it added that that consumer spending will have a large impact on the freight market in August and September and will be affected by federal stimulus efforts.

“The entire supply chain is being forced to adapt to changes in consumer buying patterns, which affects everything from the equipment types needed for delivery to warehousing capacity,” Adamo said. “Increased online shopping is here to stay and shippers and carriers alike are being forced to adjust.”

When asked in a recent interview if reefer and dry van conditions are fully back to pre-COVID-19 levels, Adamo said that is difficult to gauge, as the last full pre-COVID-19 month was February, which is traditionally the slowest month of the year for truckload freight, whereas June and July are busier. 

What’s more, he said that comparing June 2020 to June 2019, in an absolute sense, reefer and dry van freight volumes and rates are about where they were last year, with the caveat that 2019 was a lackluster year for trucking but “normal” by most accounts.

In terms of the biggest concerns, in the coming weeks and months, for spot prices and volumes, as they relate to COVID-19, Adamo said there are many things to watch for, highlighting a few specific areas.

“The first one is the general inconsistencies that come with individual states, counties, and municipalities re-opening economies based on their own guidelines,” he said. “They create uncertainty, and not every segment of the freight economy is affected in the same way. For instance, the pace of consumption at restaurants and bars, schools, sporting events, caterers, and corporate cafeterias affects the foodservice industry and, by extension, a large portion of the food supply chain, but not groceries. Back-to-school shopping is an $80 billion retail event, and when parents’ priorities shift from apparel and school supplies to online services because their kids are home, they’re still shopping but they’re making different choices than what supply chains and van carriers have planned for.”