DAT says spot market remains on typical seasonal pattern in January

Spot market freight volume and demand patterns remained on a typical seasonal trajectory in January, according to data recently issued by Portland, Oregon-based freight marketplace platform and information provider DAT, a subsidiary of Roper Industries, in its DAT North American Freight Index.

DAT defines the North American Freight Index as a measure of conditions on the spot truckload freight market.

January spot market freight volume fell 9.1 percent in January compared to December as typical truckload line haul rates fell and followed seasonal patterns, DAT said. Taking that a step further, DAT said that January spot market freight volumes have only headed up 3 times in the last 20 years––2010, 2013, and 2014.

Based on equipment type, van freight availability fell 15 percent in January, with flatbed trailers up 6.1 percent, while reefer volume was down up 8.9 percent. As for spot market rates, vans and reefers were down 1.3 percent and 1.1 percent, respectively, compared to December, with flatbeds down 0.6 percent, which does not include fuel surcharges.

On an annual basis, DAT said that over all spot market freight availability was off 35 percent, marking the 13th month in a row of annual declines, which it attributed to “a combination of tepid freight growth and abundant capacity.”

Looking at demand, DAT said January van demand fell 32 percent, with reefer volume and flatbed freight availability down 37 percent and 42 percent, respectively. And line haul rates fell 7.4 percent for vans, 7.9 percent for reefers, and 8.1 percent for flatbeds on an annual basis. 

DAT said that total rates paid to carriers fell 14 percent in January, due largely to a 49 percent fuel surcharge drop off that makes up a portion of the rate.

DAT Analyst Mark Montague said in late 2015 that current spot market spend is within 15 percent of historical norms. And with “disruption” currently absent, these rates are returning to a more normal level, while also carving out a new history in the form of an industrial-led recovery, while also being paced by inroads in the oil and gas sectors, as well as other ones, too.

And so far in February, spot market demand trends are still soft, according to Robert W. Baird & Co. analyst Ben Hartford.

“After a slight improvement in spot demand and pricing to end January, trends have remained soft in February,” he observed in a research note. “Note that March is far and away the most seasonally consequential month of 1Q; expectations remain muted, with little signs of improvement in trends during March above and beyond normal seasonality. Shipper bid activity remains robust (within both truckload and intermodal); we continue to expect core contractual truckload industry pricing growth during 2016 of +1-2%, but see risk of flattish growth if demand trends soften further.”