Spot truckload market shows mixed signals in September as volumes slip and rates inch up, reports DAT

Following August spot truckload volume and rate declines, September readings were more mixed, while conditions largely remained the same, according to the new edition of the DAT Truckload Volume Index, which was released today 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 September, including:

• the van TVI, at 234, was down 3% compared to August and down 2% annually;
• the refrigerated (reefer) TVI, at 184, was down 7% compared to August and up 2% annually;
• the flatbed TVI, at 307, was up 1% compared to August and up 9% annually;
• national average spot rates mostly were down, with van, at $2.05 per mile, up $0.02 from August, reefer, at $2.44 per mile, up $0.03 from August, and flatbed, at $2.50 per mile, up $0.01;
• linehaul rates, which exclude an amount equal to an average fuel surcharge, were in line with changes to broker-to-carrier spot rates, with van up $0.02, to $1.63 per mile, reefer up $0.03, $1.99; and flatbed up $0.01, to $2.00; and
• contract rates saw declines, with van, at $2.42 per mile, flat sequentially and down 0.5% annually; reefer, at $2.74 per mile, up $0.02 sequentially and flat annually; and flatbed, at $3.06 per mile, down $0.02 and down 0.8% annually

The firm explained that while volumes came in lower, spot rates saw slight gains, and DAT Chief of Analytics Ken Adamo said that September’s upward pricing pressure was not the result of demand, which he said is a trend worth watching in advance of the traditional peak season in October and November. He also observed that freight imbalances and changes in available capacity drove rates higher in certain markets, instead of volumes.

“Rising rates in the face of stagnant volumes are not good,” said Adamo, in an interview. “It is like having inflation without rising wage rates and is a problem. If you're a broker, you have rising rates and no volumes to offset it, because brokers—as we saw during the peak of Covid or during ELD implementation (electronic logging devices)—can live on low percent margins. They make up for that in really, really high volumes. What they can't do is kind of see margins compress. They were already at cycle lows, but seeing them compress and then not have the volume to offset that.”

As for carriers, he explained that some carriers are benefiting, which he described as kind of the rub of lower volumes, but a little-higher rates, in that there is less to go around, but the people that are getting the higher rates are feeling better off than they were a few weeks ago. That comes with the caveat, though, that things will come back down, as the market comes to the reality that there is no real systemic market change underway, he added.

What’s more, he said that this would probably impact backhaul lanes more than head haul lanes, such as the long-haul trunk lanes returning back to major outbound shipping destinations. The reason for that, he surmised, is that in correlating the average rate per mile, in an absolute sense, to the percentage change as a result of it, it is going be a strong negative correlation, in that low-rate per-mile lanes are seeing a bigger percentage increase.

“In terms of lane imbalance, you are seeing some things going up and other things going down, and that does not happen when you have wholesale, systemic increases in volume and macro pressure on the system,” he said. “For the latter, that is not the environment we are in right now.”

When asked about Peak Season, Adamo was blunt, saying he expects things to be pretty dismal, as port volumes trended down in September after a solid August.

“I think volumes will be weak and maybe buoyed by slightly better rates for some carriers, especially for those with five-to-10 trucks and are getting a nice little boost of 20% for their backhaul lanes,” he said. “That is going to be helpful for you in the fourth quarter. I don't want to minimize the fact that this is a good thing for a subset of carriers. I do think we'll still continue to see carriers bleed out, though, and continue to sort of find macro equilibrium. September was a pretty gnarly month in terms of carrier net interstate motor carrier accounts. We saw around negative 1,200 motor carrier authorities come out, which was basically tied with January, which always flushes carriers on the market for the highest net decrease of the year. When you look at that, it looks like there is going to be more attrition until the market catches them.”