DAT reports another record month of spot market freight volume for September

Data issued this week by Portland, Oregon-based freight marketplace platform and information provider DAT continues to highlight the ongoing trend of a very strong spot market for the truckload sector.

According to its data, spot market volume for the month of September was up 32 percent on an annual basis and set a new record for the 14th straight month, with gains for each of the three equipment categories it tracks, including load availability for: dry vans up 42 percent; refrigerated (reefer) up 24 percent; and flatbed volume up 46 percent.

As for rates, DAT said the national average for truckload spot market rates headed up 15 percent for vans and 16 percent each for reefers and flatbeds.

On a sequential basis, DAT reported that over all flatbed availability fell 5.5 percent from August to September, and freight volume for vans rose 3.0 percent, dropped 4.1 percent for reefers, and 12 percent for flatbeds, while van rates were up 2.0 percent, reefer rates rose 2.8 percent, and flatbed rates dipped 2.1 percent from August to September.

A general consensus for the ongoing strength in the spot market––for both volume and rates––among industry stakeholders is tied directly to the capacity shortage, with larger shippers running routing guides awarding lanes to carriers and brokers when they suddenly cannot get capacity and then needing to turn to brokers in the spot market.

In a research note, Stifel Nicolaus analyst John Larkin observed that truckload supply and demand was very tight in the second quarter and loosened up in the third quarter, while spot market prices have jumped, coupled with a modest acceleration in contract pricing.  These factors could lead to similar spot market conditions in the coming months, with Larkin explaining a bigger supply shortage is likely on tap in 2016 and beyond, when additional federal safety regulations take effect.

At the Council of Supply Chain Management Professionals Annual Conference last month, Transportation Intermediaries Association President and CEO
Bob Voltmann said that spot market strength is likely to continue as third parties are walking away from contracted pricing due to a changing capacity situation in the market.

“In reality the spot market for eight months of the year is cheaper than the contract rate,” he said. “It is a bumpy ride those other four months, but when you average it out over those 12 months the spot market is cheaper market and [industry] data supports that.”