DAT Truckload Volume Index highlights mixed spot rates and volumes for March

The March edition of the DAT Truckload Volume Index (TVI), which was issued this week by DAT Freight & Analytics, was mixed.

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.

DAT’s data highlighted the following takeaways for truckload volumes, load-to-truck ratios, and rates, for the month of March, including:

• the Van TVI was up 10% over February, to 233; the Reefer TVI was up 8% over February, to 178; and the Flatbed TVI was up 23% over February, to 268, marking the first time the TVI for all three equipment types were up for the first time since July 2022, with DAT observing March is typically higher than February, due to it being a longer month;
• the spot van rate—at $2.16 per mile—was $0.08 below February and down $0.89 annually, with the contract rate average—at $2.75—down $0.12;
• the spot reefer rate—at $2.50 per mile—was off $0.09 sequentially and down $0.95 annually, with the contract rate—at $3.07 per mile—down $0.09 compared to February;
• the spot flatbed rate—at $2.71 per mile—was up $0.01 sequentially and down $0.72 down annually, with the contract rate—at $3.37 per mile—down $0.06 compared to February (these marked the lowest national average spot van, reefer, and flatbed rates since July 2020);
• the national average van line-haul rate—at $1.67 per mile—was off $0.04 compared to February and down $0.15 compared to January, with reefer line-haul rates—at $1.96 per mile—down $0.05 compared to February and down $0.79 annually, and the average flatbed line-haul rate up $0.05, to $2.12, compared to February, and down $0.48 annually;
• the national average price of on-highway diesel fell $0.11 from February to March, with surcharge amounts off $0.04, to $0.49 per mile for van freight, $0.54 for reefers, and $0.59 for flatbeds; and
• the national average van load-to-truck ratio (these ratios reflect supply and demand on the spot market and the pricing environment for truckload freight) fell from 2.5 to 2.0 in March, with 2.0 loads for every van posted to the DAT One marketplace, down from 4.6 in March 2022, with the reefer ratio falling from 3.8 in February to 3.0 in March, down from 8.4 in March 2022, and the flatbed ratio went from 13.6 in February to 15.5 in March, down from 89.8 in March 2022

For the week of April 17-23, DAT noted that national average van and reefer line-haul rates saw respective annual declines of $0.52 and $0.56, with the total number of loads posted on the DAT One network rising for the second straight week, up 6.5% to 1.42 million loads. And dry van load post headed up 8.1% to 562,869 loads, with reefer posts up 6.7% to 234,504 loads, and flatbed posts up 4.9% to 621,882 loads.

What’s more, DAT said capacity tightened, for the week of April 17-23, with the total number of trucks posted to the DAT One load board falling 3.3% to 408,759, down for the second straight week and down 3% annually.

“The combination of more loads and fewer trucks pushed load-to-truck ratios higher last week, a signal that rates may follow. Something to watch,” said DAT.

DAT officials explained that despite higher freight volumes, March’s low rates ended what it called a challenging quarter experienced by the majority of truckload carriers and freight brokers, with the exception of flatbed freight, as spot market pricing and demand have been steady year-to-date.

“While shippers are taking advantage of the current situation to stabilize their carrier base and bring their contract rates back in line, the spread between spot and contract rates was historically large—59 cents a mile for van freight, 57 cents for reefers and 66 cents for flatbed freight,” said Ken Adamo, DAT chief of analytics, in a statement. “We expect spot rates to remain at ‘touch-bottom’ levels until retailers start replenishing inventory for the end-of-the-year holidays.”

In a March interview, DAT Principal Analyst Dean Croke explained that going back to late 2023, DAT anticipated the first quarter would be much quieter than normal, saying things are playing out that way, to date.

“We did see a little bit of a bump in dry van volume in February,” he told LM. “Dry van and reefer had very strong volumes to end February, but that was really the end of month shipping surge that we would normally see. We were hoping it may be the start of some good things to come, but volumes dropped last week so it was really an end of month surge. When you look at spot market volumes, they are half of what they were a year ago. They were within 2% of the average for week 10 in pre-pandemic years and are seasonally where you expect them to be when taking out 2021 and 2022, because they were aberrations, in terms of volume.”

The reason that is a good data point, he noted, is because there is a lot of talk about supply chains are getting back to normal, congestion is easing, and February import levels are in line with May 2020 levels, at the bottom of the pandemic crash. While he called that import comparison “alarming” he said that comes with the caveat that imports only represent about 10% of truckload freight, but still serving as a reason as to why there was a lot of volatility in the market related to port congestion.

“We saw a lot of volume spill over into the truckload market,” he said. “That has largely disappeared. All that congestion and import volume is back to fairly normal March levels, which is the low point on the shipping calendar. Lots of data points suggest that it was a normal February going into March, and things are tracking pretty much about where we would expect things to be for a quarter like this.”    

Conversely, though, Croke said that capacity is trending along at much higher levels than what is seen historically, due to the record influx of carriers that really peaked in June 2021, when the motor carrier sector was adding around 8,000 carriers per month. What’s more, he said capacity is still leaving the industry but at a slowing rate.

“When thinking about carrier sentiment in the spot market, in a normal year, we add about 1,000 carriers a month, and, at the moment, we have been losing about 2,000 carriers a month since October,” he said. “But that rate of decrease has bottomed out and that sentiment still has not turned positive from a carrier perspective. We still have a way to go to get demand close to where supply is, because supply is still overshooting where demand is in the spot market. Spot market volumes are where would expect them to be. We still have a lot of carriers in the market as a hangover from 2021 and early 2022.”

Looking ahead, Croke said that, DAT has maintained there will be an inflection point towards the end of the first quarter and into the start of the second quarter, for dry van, saying that dry van rates have been trying to find a bottom in the market over the last four-to-five weeks.

“It feels like they are. There is a little bit of pessimism coming into rate forecasts, but it is about where we expected it to be,” he said. “We are at about the bottom of the freight cycle, and they would start to come back up eventually. That will be in Q2 based on the way things are shaping up right now. We are on track to do that and then, of course, in four-to-six months, we will see contract [rates] come back up, because replacement rates are still coming into routing guides at about -11%. Contract rates are still dropping in routing guides so that will persist through the first half of the year. And capacity bleeding off will tighten the freight cycle. Shippers will turn to the spot market to recoup some of their procurement costs, because the rates will be a lot cheaper and will accelerate capacity out of the industry. We are at about $1.75 per mile, and carriers cannot withstand rates going any lower. Diesel is not going down fast enough to offset higher operating costs. We are kind of at the floor now. That has held true, because carriers have been more price disciplined because diesel costs have been such a big component over the last eight or nine months.”