DAT’s August Truckload Volume Index represents a mixed bag for spot volumes and rates

August spot truckload market conditions represented a mixed bag, of sorts, with shipments up and rates down for the third consecutive month, 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 August, including:

• the van TVI, at 289, was up 2.8% over July and up 6.3% annually;
• the refrigerated TVI, at 220, was up 4.3% compared to July and up 17.6% annually;
• the flatbed TVI, at 287, was up 0.3% compared to July and down 0.3% annually, snapping a three-month stretch of sequential declines;
• the national average spot rate, at $2.01 per mile, was down $0.05 compared to July;
• the national average spot reefer rate, at $2.41 per mile, was down $0.04;
• the national average spot flatbed rate, at $2.41 per mile, was off $0.07 compared to July;
• the average van linehaul rate (DAT explained that linehaul rates subtract an amount equal to an average fuel surcharge), at $1.60 per mile, fell $0.03 compared to July and up $0.03 annually, with the reefer rate, at $1.96 per mile, down $0.02 compared to July and up $0.01 annually, and the flatbed rate per mile down $0.05, to $1.92, and up $0.02 annually;
• contract rates saw sequential declines, with van, at $2.40 per mile, down $0.03, reefer, at $2.74 per mile, down $0.07, and flatbed, at $3.08, down $0.03 (DAT observed that contract rates have been down annually going back to August 2022, which it said reinforces the protracted pricing challenges of truckload carriers, with around 85% of all truckload freight moves under contract); and
• load-to-truck ratios, which DAT said reflect truckload supply and demand on the DAT One marketplace and indicate the pricing environment for spot truckload freight, were down sequentially, with van, at 3.6, down from July’s 4.2, reefer, at 6.0, down from July’s 6.5, and flatbed, at 9.8, down from July’s 11.9

“Linehaul rates were year-over-year positive for the first time since March 2022, a trend that should continue into the fall shipping season,” said Ken Adamo, DAT Chief of Analytics, in a statement. “However, year-over-year comparisons are little consolation for truckers looking for better pricing now.”

In an interview with LM, Adamo described current market conditions as akin to “treading water,” in that things are marginally better compared to a year ago but not booming either. And he added that the market is looking for some type of demand signal and that it is probably not going to be a situation where the lack of real supply is going to drive the market into the next upswing in rates.

“I think that is really playing out; it is certainly going to stop the precipitous decline,” he said. “If you ask your average trucker, broker, or shipper, they would tell you things are pretty unchanged since the 4^th of July, with things coming down a little bit and contracts largely coming in flat to maybe up a little bit, depending on mode and geography. I think when you are a broker or carrier that is handling any amount of contract freight, you’re probably looking at your whole portfolio and treading water.”

Addressing a potential East and Gulf Coast ports strike, as well as Hurricane Helene potentially setting its sights on the Gulf Coast, Adamo observed that those are things that could serve as catalysts to drive the aforementioned demand signal.

Should a port strike come to fruition, he noted it could result in a material short-term uptick, citing industry estimates suggesting that for each day there is a full labor stoppage, it can result in seven-to-10 days’ worth of cargo that gets backlogged.   

“There is a two-week window that are the busiest ocean shipping weeks of the year, and it is right now—this week, next week, or the week after, depending on how you slice and dice the calendar,” he said. “You are starting to see some embargoes from some of the longer-haul intermodal providers that don’t want to get stuck holding things that are maybe coming from a little bit further away that come off the East Coast. The thing that worries me is that the parties are not even at the table. The issue here is that, for the union members, this is probably their last big swing at wage inflection before automation takes a massive bite out of that industry.”

What’s more, Adamo said it would have a huge short-term impact on freight, but perhaps not a lasting impact like the pandemic or ELD regulations did and the subsequent changes persisted.

Looking at September on a month-to-date basis, Adamo said that things are underwhelming.

“Volumes are not in a great spot, and neither are rates,” he said. “Carriers are just continuing to scrap by. The market needs to come into the fall shipping peak. A lot of major shippers and ocean carriers focused on pulling [imports] forward earlier than usual and moving that cargo West. It is not really manifesting into these peak shipping volumes.”

But on a more positive note, he said that there are some green shoots on the horizon being seen in pricing departments for large carriers, with bids coming back flat-to between 1% and 3% up, coupled with stretching contract terms and payment terms, from 30 to 45 days or a 12- or 18-month contract, as opposed to a previous six-month contract.

“All of those things are different types of concessions, but I do think with interest rates coming down we are already starting to see builder subsidized lending rates for 30 years or into the fours [percent] but not a lot of people are starting up major primary home construction projects.”