DAT reports strong annual spot market volume gains for May

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.

By ·

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, 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. Contact Jeff Berman

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!

Article Topics

DAT · spot market · All Topics
Latest Whitepaper
Digital Issue: The Current State of Third-Party Logistics Services
It has become quite clear that logistics professionals are now facing an unprecedented set of challenges. From tightening capacity, to ongoing regulation hurdles, to the complexity brought on by e-commerce, today’s shippers are transforming the way they manage their logistics operations.
Download Today!
From the June 2017 Issue
Here are five trends that every shipper­—and potential shipper—must watch as the demand for experienced logistics and supply chain professionals soars.
2017 Rail/Intermodal Roundtable: Volume stable, business steady
Cross-Border Logistics: NAFTA tune-up time
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Women in Logistics: Breaking Gender Roles to Win the War for Talent
In this session you'll hear from a panel of women who are now leading top-level logistics and supply chain operations. The panel will share their success stories as well as advice for women who are now making their way up the ladder.
Register Today!
EDITORS' PICKS
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...
The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...

2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...