DAT reports April spot market activity is down

Spot market patterns were mixed to a degree in April, according to according to recent data released by DAT, a subsidiary of Portland, Oregon-based TransCore.

DAT said that spot market freight volumes in its DAT North American Freight Index were down 16 percent annually in April, adding that April 2012 represented a record-high. Volumes for vanload, reefer, and refrigerated were down 20 percent, 10 percent, and 15 percent, respectively, compared to a year ago.

DAT officials said that from March to April, increases in spot market volume are typically expected, but it noted that bad weather conditions, including flooding in the upper Midwest could have been a factor leading to more limited freight availability. Van and refrigerated availability fell 14 percent and 17 percent, respectively, from March to April while flatbeds saw a 6.6 percent gain.

On the rate side, DAT said that spot market van rates fell 0.8 percent and flatbed rates were off 5.3 percent annually, and refrigerated rates inched up 2.0 percent. And compared to March, van rates were up 0.8 percent, flatbed rates were up 4.5 percent, and refrigerated rates were up 5.5 percent.

The 16 percent annual decline was significant, but David Schrader, senior vice president of DAT’s freight matching business, pointed out that April 2012 was the highest volume for the month of April DAT has seen going back to April 1996.

And DAT Marketing Manager Ken Harper observed that from Chicago to south of St. Louis, it was not just weather that drove down volumes, as much as it was weather impacting high traffic areas.

Looking at rates, DAT said it typically expects rates to surge around this time year on the refrigerated side, as well as vans and flatbed, and the company said that refrigerated prices increased at the end of April, which was later than expected, while van and flatbed rates have hit a plateau. And among the reasons it cited for this are: more drivers, with the trucking industry adding 11,700 drivers in April, according to the Bureau of Labor Statistics; cheaper fuel, which helps the economy and leads to an increase in freight volume and higher rates; and a later harvest, with crops coming in a couple of weeks late, particularly in Southern California, and which DAT said has postponed the normal pattern of reefer rate increases that drive van rates up.

In May, Schrader said that a little more than halfway through the month volumes are trending down compared to this point last year.

“It is in line with the decline we saw in April,” he said. “It is continuing on. May 2012 was reasonably strong, but we are seeing lighter freight now. It is still a fairly robust marketplace but it is a tougher comparison. Freight brokers are telling us that market conditions are reasonably healthy but not phenomenal by any stretch. We are seeing a lot of interest from shippers trying to secure loads, with not as many loads available. There tends to be a bit more slack supply and capacity than we would expect to see. Things move in the spot market when capacity is tight. What we have is situation where there is a fair amount of balance between capacity and freight out there.”