DAT Truckload Volume Index highlights strong van and reefer gains

Volume gains in May helped to drive up spot truckload rates in May, according to the new edition of the DAT Truckload Volume Index (TVI), which was recently issued by DAT Freight & Analytics.

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, and rates, for the month of May, including:

• the van TVI, at 289, up 4% compared to April and up 13% annually, hitting a new all-time high;
• the refrigerated TVI, at 224, up 4% compared to April and up 25% annually, also hitting a new all-time high;
• the flatbed TVI, at 301, down 2% compared to April, snapping a five-month stretch of growth;
• the national average spot van rate, at $2.01 per mile, was up $0.02 compared to April and down 2% annually, falling for the fourth consecutive month;
• the national average spot reefer rate, at $2.41 per mile, rose $0.09 compared to April and was down 1.2% annually, falling for the fourth consecutive month;
• the national average spot flatbed rate, at $2.52 per mile, was flat compared to April, and off 5% annually;
• average line-haul rates, which subtract an amount equal to an average fuel surcharge, came in at $1.58 per mile, up $0.05 compared to April, for van, with reefer up $0.09, to $1.94, and flatbed, at $2.01 per mile, rose $0.04;
• national average contract rates were mixed, with contract van off $0.02 from April, to $2.43, contract reefer down$0.03 from April, to $2.79 per mile, and contract flatbed up $0.01, to $3.16 per mile; and
• load-to-truck ratios saw gains, with van, at 4.4, up from April’s 1.9, with 4.4 loads for every van truck on the DAT One marketplace, reefer, at 6.3 was up over April’s 4.8, and flatbed fell to 18.0 from April’s 18.5

“Stronger van and reefer volumes are consistent with May, when shippers move seasonal produce and retail goods and truckload capacity tightens due to the Roadcheck inspection event and Memorial Day holiday,” said Ken Adamo, DAT Chief of Analytics, in a statement. “Carrier attrition created further pressure on capacity.”

In an interview with LM, Adamo said it was emblematic, in a sense, that the market was at equilibrium in May, due in part to Roadcheck’s effect on rates.

Using Savannah, Ga. as an example, he noted that rates peaked for Roadcheck week and then due to some low-risk strike threats and some ongoing port diversions out of Baltimore drove activity and rates higher.

“When the market is still grossly oversupplied with capacity, those bumps happen and then go right back,” he said. “We saw that in January when the cold snap hit, and it then went back down almost immediately. The industry has attributed thousands of more trucks since then and more carriers. So, the fact that we are closer to equilibrium, or at equilibrium, seems to suggest there will be a stiffer response to those things. And we are seeing that strength continue into this month, which, to me, speaks to the fact that we are probably right at cycle.”

To that end, Adamo pointed out that June 19 was the first day in 26 months that annual rates positive on a daily basis. While there could be some fluctuation, he said that serves as an indication that by July 4 a case could be made, in earnest, that a new cycle has begun.

“I think I tend to agree with the popular sentiment that once we're normalized, seasonality will become more apparent,” he said. “My guess is that if this becomes a normal year, which is probably most likely going to be like 2016 but just adjusted for inflation, what you'll see is things will build until the fourth of July. You'll go into that summer lull and then you'll start to build up that in the Labor Day. So that's honestly what I expect. I think we'll probably have a really good season building up into the Fourth of July. The days start getting shorter, and things ebb back a little bit. A lot of big shippers focus on ocean freight post-Fourth of July, which is their big August and early September focus, and they start to turn to drayage, warehousing, and truckload late September and into October. I think that is the normal scenario.”