Subscribe to our free, weekly email newsletter!


DAT reports strong annual spot market volume gains for May

By Jeff Berman, Group News Editor
June 16, 2014

While the months on the calendar continue to change, the situation when it comes to spot market activity remains consistent in terms of annual gains.

This thesis was evident in data recently issued by Portland, Oregon-based freight marketplace platform and information provider DAT.

DAT reported that May marks the 11th straight month to see an annual record high for spot market freight volume, with its DAT Freight Index in May seeing a 40 percent annual increase.

While the reasons for high spot market activity can vary, DAT cited many reasons for why it continues to be hectic going back to July 2013, including last winter’s weather, the regulatory environment, and the ongoing driver shortage.

While the spot market again saw increased annual activity, DAT reported that on a sequential basis, freight volumes dropped 2.1 percent from April to May.

DATA reported the following data for May:
-dry van freight volume, refrigerated freight volume, and flatbed freight volume was up 25 percent, 18 percent, and 85 percent, respectively, compared to May 2013;
-van freight availability was up 1.0 percent from April to May, reefer was down 4.8 percent for the same period, and flatbed volume was off 1.6 percent

On the rate side, DAT explained that the combination of higher capacity and capacity constraints led to what it called added rate pressure, with average van rates on the spot market up 18 percent annually.

Other rate shifts included the average reefer rate seeing a 20 percent annual increase and flatbed rates up 12 percent compared to May 2013. Sequentially, van rates dropped 2.0 percent from April to May, with reefer rates up 3.4 percent, and flatbed up 1.1 percent.

Even with these annual gains, there appears to be some normalcy within the spot market, according to BB&T Capital Markets Analyst Thom Albrecht.

“The freight world remains busy, albeit not chaotic like it was in Q1’14, as networks and freight flows have normalized,” he wrote in a research note. “Carriers are experiencing yr/yr volume increases and rate improvements, but in our opinion 2014 is not the tipping point carriers believed it was in February and March. As we have written, we believe this is a transitional year, akin to 2003 (capacity tightened, rates began to rise), but not 2004 (Carrier “Nirvana”). The creeping regulatory burden and the deteriorating driver situation all point to gradual capacity tightening in 2015 and 2016, but this year will have some occasional fits and starts.”

Echo Global Logistics CEO Doug Waggoner recently told LM that spot market gains, both in terms of volume and rates, tie 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 turn to brokers in the spot market.

“Brokers have a much bigger rolodex of carriers so if I am a Fortune 500 truckload shipper and have got 100 carriers that are assigned to different lanes…when those 100 carriers cannot supply me the required capacity, I go to brokers that have tens of thousands of carriers,” he said.

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

Lyon, France-based Norbert Dentressangle, a $5.5 billion global third-party logistics (3PL) services provider focused on global logistics, transport, ocean, and air services, said today it has acquired Des Moines, Iowa-based Jacobson Companies, a value-added warehousing (VAW) company, for $750 million from private equity firm Oak Hill Capital Partners.

Download the newly released research report, "Transportation Management Systems" conducted by Peerless Research Group (PRG) on behalf of Supply Chain Management Review and Logistics Management magazines. Learn what logistic experts are saying about their current supply chain technology infrastructures, how they tackle the transportation component, and revealed the gaps that still need to be filled in order to attain end to-end visibility of a streamlined supply chain.

From cost center to growth center. Get insightful opinions on changes in the marketplace from this independent survey of warehouse personnel. Motorola Solutions examined the current warehousing marketplace in our 2013 Warehouse Vision Report, conducted April-May of 2013.

Even though not all publicly-traded less-than-truckload carriers (LTL) have posted second quarter earnings yet, the early consensus for those that have issued results is looking very good.

The advance estimate for second quarter GDP at 4.0 percent could serve as a sign of a steadier and improving economy.

Article Topics

News · DAT · spot market · All topics

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA