DAT’s Truckload Volume Index shows evidence of an entrance into a new truckload freight cycle

A “new truckload freight cycle” has arrived, with September spot truckload volumes and rates highlighting how a typical cadence of cyclical demand for truckload capacity is heading up, according to the new edition of the DAT Truckload Volume Index, which issued 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 271, was down 7% compared to August and up 6% annually;
• the refrigerated TVI, at 208, was down 7% compared to August and up 12% annually;
• the flatbed TVI, at 272, was down 2% compared to August and up 2% annually;
• national average spot rates, for each three segments, respectively fell $0.03, from August to September, with the declines due to lower fuel surcharges, with the spot van rate at $1.97 per mile, the reefer rate at $2.37, and the average flatbed rate at $2.38;
• the average van linehaul rates (DAT explained that linehaul rates subtract an amount equal to an average fuel surcharge), were flat sequentially, at $1.59 per mile for van freight (up $0.02 annually), $1.95 for reefer freight (up $0.03 annually), and $1.92 for flatbed freight (up $0.06 annually);
• national average contract rates again saw sequential declines, with van, at $2.39 per mile, down $0.01, reefer, at $2.73 per mile, down $0.02; and flatbed, at $3.04, down $0.03; and
• load-to-truck ratios were mixed, with van, at 3.5, off from August’s 3.6, reefer, at 5.0, down from August’s 5.0, and flatbed, at 12.8, up from August’s 9.8

“September showed we’re firmly into a new freight cycle after nearly 22 months of rather extreme expansion and 27 months of contraction,” said Ken Adamo, DAT Chief of Analytics, in a statement. “We expect seasonality to provide some tailwinds over the next few months, and hopefully modest improvements in rates coupled with retail freight volumes and stable fuel prices can get the motor carrier base on more solid footing.”

In an interview with LM, Adamo described September as not overly exciting, in terms of spot market activity, noting that it marked the third month in 2024 to see positive annual rate gains.

“That's kind of the story,” he said. “I think that will become much more greatly accelerated in October with tropical weather and the port strike that was or wasn't, depending on how you think about that. “It definitely had an effect, whether for how long it was in effect or not. There was a lot of pull forward, which I think gave us a little bit of tailwind in anticipation of some port disruption. So, you saw a lot of shippers pulling forward. Rates were up about 3% give or take, year over year basis, adjusted for fuel. They backslid a couple pennies sequentially. But again, they're just kind of treading water in that slightly year over year positive area.”

When asked about the market returning to a new truckload freight cycle, Adamo explained that in taking a look back at past cycles, the cycle from 2013 to 2017 took off in July 2013 and took a while to get going, with five-to-six months of treading water prior to the holidays, when activity really took off.

And he noted that could be the case again this time around, with a weak seasonal peak in 2023, but should the momentum occurring now continues into November and December that could be very beneficial from a rating perspective.

“We certainly don't have a ton of excess capacity just laying around—that's very much not the case,” he said. “Last year, at this time of year, I felt like we did. One part of this has to do with a seasonal bump in demand, coupled with these aberrant events like Helene, which really devastated large parts of the Southeast more than it did Florida, and Milton, which was a big shock to the system, from a buildup of a week or two, pre- and post- following the port issues.

What’s more, Adamo explained that these things are not long-term systemic demand drivers, with the caveat that until there is a demand catalyst, the freight recovery will be tempered as it relates to demand. I was recently told that it is really hard to sustain recovery on the back of capacity exiting. That is really true. You need both.”

On a month-to-date basis in October, Adamo said volume is up, with rates doing well, too.

Looking ahead, barring a big systemic shift in demand, which could happen post-election, in that it will bring some certainty back to the market, Adamo said things are likely to come back down, with the expectation of a slow January and February to start 2025.

“With fuel included…we’re actually creeping up on 2017 levels, from a rate perspective,” he said. “When you take fuel out, which is 99% of our analytics on a trend basis excluding fuel, we have almost a full dime between last year’s rates, just based on the back of recent events but still well short of 2017 and 2018 levels by ten-to-15 cents. We are kind of in ‘no man’s land,’ from where we are on a rate perspective, but that is kind of a good thing, I think, because of how poor the last couple of years have been. It remains to be seen, though, in terms of if we see that continued strength and demand, with interest rates down and homebuying seeming to be ticking up a little bit.”