November DAT Truckload Volume Index is mixed in a compressed month

Coming off of a solid October, spot truckload volumes and rates somewhat abated in November, driven in part by seasonality and the timing of the Thanksgiving holiday, according to the new edition of the DAT Truckload Volume Index, which was recently issued by DAT Freight and 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 November, including:

• the van TVI, at 246, was up 18% compared to October and down 1% annually;
• the refrigerated TVI, at 242, was down 23% compared to October and up 7% annually;
• the flatbed TVI, at 242, was down 23% compared to October and down 5% annually;
• national average spot rates, for each three segments, were mixed, from October to November, with van flat, at $2.02 per mile, reefer up $0.06, to $2.45 per mile, and flatbed down $0.05, to $2.37 per mile;
• the average van linehaul rates (DAT explained that linehaul rates subtract an amount equal to an average fuel surcharge), remained mostly positive, as has been the case since August, with van freight up $0.01 over October, to $1.64 per mile, reefer freight up $0.07, to $2.04 per mile, and flatbed down $0.03, to $1.93 per mile, with rates for each segment up around $0.05 annually;
• national average contract rates were mixed, with the contract van rate, at $2.40 per mile, down $0.01 sequentially and down $0.11 annually, the reefer rate, at $2.74 per mile, flat sequentially and down $0.18 annually; and the contract flatbed rate, at $3.03 per mile, down $0.01 sequentially and down $0.11 annually; and   
• the DAT iQ New Rate Differential for van freight topping zero for the third consecutive month for the first time going back to Spring 2022 (DAT said the NRD measures the contract market by comparing rates entering the market to those exiting, with a positive NRD signaling a tightening market and higher rates for shippers)

“Shippers moved so much freight into the U.S. earlier this year, ahead of potential tariffs and port strikes, that we didn’t see the volumes we might expect in November,” said Ken Adamo, DAT Chief of Analytics, in the TVI. “The exception was reefer freight. The late Thanksgiving gave grocers a few extra shipping days for fresh and frozen goods.”

In an interview with LM, Adamo explained that November spot market activity largely played out as was expected.

A key reason for that, he explained, was due to Thanksgiving late in the month, on November 28, which compressed market activity.

“I think what we expected is what happened, where there was less of a lull between Thanksgiving and Christmas, with things seeming to be generally shot out of a cannon right now,” he said. “If you look at kind of the soft study of the market and what carriers are saying, I've never seen more loads posted on social media in a positive sense in, say, three years. You're seeing things kind of behave as seasonally expected. If I had to put like a percentage to it, I'd say it's probably 80%-to-90% seasonality and maybe 10%-to 20% of the market is giving a little bit of a tailwind.

From a capacity perspective, he explained that this is the time of year in which there are a lot of carrier exits, even in a good year, because carriers don’t want to re-up insurance payments or taxers coming due for next year. And he added that in looking at DAT’s customer activity on the carrier side, November tends to be viewed as a low-acquisition, high-churn month regardless.

“We are just not seeing as much of that,” he said. “There's one little artifact of why that might be in that November, really, if you kind of count Veterans Day and Election Day, which are two pretty big trucker holidays, there's really only 17 operating days in the month. “So, for example, if your DAT subscription lapsed on Thanksgiving or the day after, you couldn't really turn it back on until December, which was the following Monday. “We're seeing a little bit of kind of weird monthly thrash there. But all in all, I think it's better in December, so far, than we would have expected from a carrier perspective.”

Looking at the market on a year-to-date basis, Adamo observed that with the market roughly five months into a new freight cycle, this is where things start to get interesting, with the reason for that being that in the last few cycles, the six-to-eight-month range is when things started to truly show progress.

“That is going to be hard to do in February, which is typically a slow month,” he said. “I think March is going to be the make it or break it month, for where this market truly is.”

But he cautioned the one wild card afloat is a potential East and Gulf Coast Ports’ strike in mid-January. Should President Biden or President-elect Trump invoke Taft-Hartley, which would prevent a strike while the parties negotiate, Adamo said that could have a significant impact on spot market activity.

“January will probably be better than expected, just given new administration coming in and the tariff pull-forward activity,” he said. “I think January outperforms a little bit. February is always going to be February and in March it could be OK if you see those volumes start a little bit early and we don't have an overly rainy February and March in California and some of the produce states and things actually get off as expected. Remember, the last couple years we've had some flood destruction and some landslides and some issues impacting produce harvests. As long as that doesn't happen, you're probably going to have a pretty darn good March, April, and May.”