Subscribe to our free, weekly email newsletter!


April spot market data from DAT shows gradual return to seasonal conditions

By Jeff Berman, Group News Editor
May 15, 2014

Spot market activity appears to be returning to a more seasonal pattern after a difficult winter, according to data issued this week by Portland, Oregon-based freight marketplace platform and information provider DAT.

DAT said that while spot market freight volume for April was up 51 percent compared to April 2013, total freight volume actually fell from March to April by 8.8 percent. What’s more, the firm said this is only the second time a March to April decline has happened in the last five years. Van and refrigerated (reefer) freight dipped 22 percent and 25 percent, respectively, from March to April, with flatbed showing a seasonal pattern growing 10 percent.

DAT’s data for the month showed that on an annual basis in April:
-freight designated for vans was up 48 percent;
-refrigerated (reefer) freight was up 53 percent; and
-flatbed freight was up 66 percent

On the rate side for April spot market activity, DAT reported that van rates were up 20 percent annually, with flatbed rates up 12 percent. From March to April, van rates were off 3.8 percent from what was a record-setting month in March, which was likely a byproduct of the difficult winter weather conditions that had a major impact on available capacity. And that situation was exacerbated when railroads had to deal with service issues that pushed freight over to motor carriers at a time when their networks were already stressed.

Other factors impacting spot market capacity availability, volume, and rates include the ongoing driver shortage and the rising costs of equipment.

“While comparisons have normalized following the impact of 1Q14 weather and timing of Easter, rates remain above prior-year levels 2Q-to-date, reflecting, in our view, sustained tight capacity from regulatory changes and reduced supply, as well as modest increases in underlying demand,” wrote KeyBanc Capital Markets analyst Todd Fowler in a research note. “We expect additional firming as produce, beverage and spring merchandise shipments more fully materialize in the coming weeks, and believe these factors have altered shippers’ perception of market dynamics, supporting greater contractual increases going forward, as is evident in pricing commentary from recent truckload earnings reports. Our current estimates assume 3 percent increases in revenue per mile for 2014, but could prove conservative based on our due diligence.”

Tom Nightingale, president, transportation logistics, for Genco, a Pittsburgh-based 3PL, said in an interview that his company has seen supply and demand for capacity come down from the near-crisis levels of January and February, noting that the market still remains tighter than it has been in years. 

“There are pockets of the country that are exceptionally tight, but as a whole the industry seems to have worked through some of the backlog created during those months and has found a new, tighter, norm than we have seen in a long time,” he explained.  “Our team is getting our customer’s freight covered, but it’s taking a lot more work and deeper carrier bench-strength than it was at this time last year.”

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Last week, the United States Department of Transportation took further steps to address various issues identified in recent train accidents involving crude oil and ethanol shipped by rail. The announcement was made by DOT with other DOT agencies, including the Federal Railroad Administration (FRA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA).

Logistics Management Group News Editor Jeff Berman had an opportunity to interview Derek Leathers, President and Chief Operating Officer of Werner Enterprises, at this month's NASSTRAC Shippers Conference and Transportation Expo in Orlando. They discussed various aspects of the truckload market, including prices, fuel, and regulations.

During this webcast our presenters will apply the findings of the 23rd Annual Trends & Issues in Transportation and Logistics Study to the world of shipper-carrier decision making. They'll examine the primary aspects that will influence the future direction for shipper-carrier decision-making.

For February, the month for which most recent data is available, the SCI dropped to -1.0 from January’s 2.6, with FTR explaining that the short term positive impact from one-time adjustments for rapidly dropping diesel prices and the suspension of the 2013 motor carriers hours-of-service expires later this year.

Seasonally-adjusted (SA) for-hire truck tonnage in March was up 1.1 percent on the heels of a revised 2.8 percent (from 3.1 percent) February decline, with the SA index at 133.5 (2000=100). This is off 0.3 percent from the all-time high for the SA of 135.8 from January 2015 and is up 5 percent annually.

Article Topics

News · DAT · Spot Market · spot market · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA