DAT March Truckload Volume Index shows mixed trends for spot TL volume and rates

The most recent edition of the DAT Truckload Volume Index, which was recently issued by Portland, Oregon-based freight marketplace platform and information provider DAT, a subsidiary of Roper Technologies, presented a bit of a mixed bag for spot truckload volumes and rates, with reefer and dry van volumes and rates up for the first three weeks and the final week of the month less than seasonal trends.

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. 

“The increases in March were based on exceptional demand from shippers through March 22, at which point the market turned dramatically,” said Peggy Dorf, Senior Market Analyst at DAT Solutions. “Consumers and supply chains began to adjust to disruptions caused by the COVID-19 pandemic, and the urgency to replenish inventory and secure available capacity on the spot market fell significantly.”

DAT’s data found the following takeaways for March:

• including fuel surcharges, spot van rates averaged $1.87 per mile nationally in March, up 8 cents from February and 4 cents from March 2019;
• at $2.19 per mile, the national average reefer rate gained 10 cents compared to February and was even with the March 2019 average rate;
• national average flatbed rates increased 4 cents month over month to $2.19 per mile, a 15-cent decline from March 2019;
• spot truckload volumes increased 16% for both vans and 12% for reefers month over month, while flatbed load counts headed up 9%; and
• compared to March 2019, volumes rose 17% for van and reefer equipment, flatbed volume was a 2% increase

 “Based on our truckload pricing data and predictive models, we anticipate further downward pressure on dry van rates through the summer unless more certainty returns to the economy,” explained Ken Adamo, Chief of Analytics at DAT, in a statement.

Adamo also observed that reefer equipment demand will see increases in tandem with the spring produce season soon kicking off on California and the Southeast, with flatbed freight, which he said has a close correlation to energy markets and construction, is still significantly impacted by the ongoing decline in oil prices.

He added that demand for reefer equipment will improve sooner, as spring produce harvests begin in California and the Southeast U.S. Flatbed freight, which is closely tied to energy markets and construction, remains significantly affected by the downturn in oil prices.

In interview with LM last month, Adamo said, at the time, that national dry van spot market rates were currently up 5%-to-7% through mid-month, which he called a substantial increase, given where things are seasonally from an overall rate climate perspective, and are not showing any signs of letting up from an empirical perspective either.

Other contributing factors he cited included declining diesel prices and a 3.15-to-1 load-to-truck ratio (as of March 15).

“2020 is kind of closely following 2017 as a way for us to model things off of a prior year,” he said. “In the past three 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. We are not there yet, but we are maybe halfway there. The next couple of weeks will be important to watch, but what we are seeing is that will mainly be driven by load volume, and the past week was a near vertical spike in load volume for posted loads in our network and our extended network.  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.”