DAT reports a return to normal spot market activity in February

Spot market patterns returned to a more normal—or post-recession—pace in February, according to data released by DAT, a subsidiary of Portland, Oregon-based TransCore.

Coming off of a highly impressive January which saw a 42 percent annual gain and a 24 percent sequential gain over December, marking the first time since DAT launched its index that freight availability rose from December to January, February was more in line with typical seasonal patterns.

For specific trucking segments, DAT reported the following sequential and annual data:
-van loads increased 7.6 percent and -11 percent annually
-reefer freight volume rose 7.2 percent and -15 percent annually; and
-flatbed freight availability was -11 percent and flat annually

DAT noted that a surge in freight for vans and reefers at the end of February served as a driver for the 7.6 percent and 7.2 percent sequential gains.

As for spot market rates, which David Schrader, senior vice president of DAT’s freight matching business, said did not increase in tandem with volumes in January, February was a mixed bag.

February van rates inched up 0.8 percent sequentially and were up 1.6 percent annually. Reefers dipped 6.0 percent sequentially and saw a 2.9 percent annual uptick, with flatbeds up 2.0 percent sequentially and down 7.5 percent annually.

“We thought February was more of a January story than a February story, as it was coming off of such elevated levels in January,” said Schrader. “February really came down to what we consider more typical volumes for the month, but they are still healthy. Over the last three years February 2011 was the highest volume for a February, followed by 2012 and 2013. It is still healthy relative to our history and was a solid freight month.”

As for March to date, Schrader said that it looks like March volume and rate data will be comparable to March 2012, with freight volume expected to be modestly down, due to March 2012 having 22 business days and March 2013 having 21.

As for signs of increasing volume between now and mid-2013, which could benefit from things like improved housing data, some retail sales growth, and new orders on the manufacturing side, and also serve as a harbinger for the future, he explained there is some reason for optimism, especially with housing now serving as more of a tailwind than a headwind.  Even with the federal budget sequester actions having the potential to limit future volume gains, Schrader said there are more positive than negative economic signs at the moment.

Mark Montague, DAT’s industry pricing analyst and chief market-watcher, said that current oil and gas trends could also provide some uplift for future volume gains over a multi-year span, with that occurring in the middle part of the country, whereas the southern region of Texas is experiencing its grapefruit harvest, and California and southern Florida produce is also on schedule.

“Right now, things look pretty normal and rates are not doing anything spectacular,” he said. “But they are creeping up, which is a normal year trend.