DAT reports gains in spot market loads and rates

Data recently issued by Portland, Oregon-based freight marketplace platform and information provider DAT showed a host of annual gains for spot market loads and capacity in February.

Aside from spot market capacity, which was impacted by harsh winter weather, DATA reported the following data for February on a sequential (January to February) and annual basis:
-spot market loads were up 8.8 percent sequentially and 86 percent annually;
-spot market capacity was down 12 percent sequentially and 22 percent annually;
-van Load-to-Truck was up 12 percent sequentially and 137 percent annually;
-spot van rates were up 2.6 percent sequentially and 13 percent annually;
-flatbed Load-to-Truck was up 41 percent sequentially and 104 percent annually;
-spot flatbed rates were up 0.5 percent sequentially and 2.4 percent annually;
-reefer Load-toTruck was up 11 percent sequentially and 146 percent annually;
-spot reefer rates were up 1.9 percent sequentially and 8.8 percent annually; and
-fuel prices were up 2.3 percent sequentially and down 3.1 percent annually

The limited spot market capacity, coupled with the increase in spot market loads, is indicative of “unyielding winter weather [continuing] to push more freight into the spot market as shippers search for available capacity,” adding that growth in the spot market is unprecedented, as evidenced by continuing gains in overall load volume and van rates approaching $2.00 per mile.

Tight capacity continues to be a main theme among shippers, carriers, and third-party logistics (3PL) services providers.

“Capacity is as tight as we have seen it in many years,” said Tom Nightingale, president, GENCO Transportation Logistics. “While the weather has certainly been a major driver of the capacity shortage, it feels like volume increases are driving at least as much of the tightness.  This is all being exacerbated by a tough driver recruitment market and carriers feeling the full impact of last year’s HOS (Hours-of-Service) rule changes.   I was speaking with a carrier last week who has several hundred unseated tractors and, like many, they are exercising choice in a supply-constrained market.”  

Nightingale also observed that GENCO is seeing carriers charging for deadhead miles and turning down freight, regardless of price, while prices in the spot market have been “through the roof” since mid-January.

While the winter weather has made a definitive imprint on spot market volumes, rates, and capacity, things are likely to return to a more typical pattern when the winter weather eventually gives way to warmer conditions in the spring.

Robert W. Baird & Co. analyst Ben Hartford wrote in a research note that his firm expects outlooks to be very constructive given better-than-expected core pricing growth and the likelihood of solid freight volume trends in the coming months after severe weather conditions (presumably) normalize.