December spot market activity turns in record-setting performance, reports DAT

Company officials said this impressive gain was the result of atypical season patterns, noting that freight levels usually peak in the second quarter and subsequently tail off the rest of the year, whereas in 2013 the market stayed firm throughout the year.

By ·

December spot market availability saw a 10 percent gain over November and a 45 percent annual hike, according to data recently released by DAT, a subsidiary of Portland, Oregon-based TransCore, in its DAT North American Freight Index.

Company officials said this impressive gain was the result of atypical season patterns, noting that freight levels usually peak in the second quarter and subsequently tail off the rest of the year, whereas in 2013 the market stayed firm throughout the year.

What’s more, the index found that the impressive annual gain in December represented a sixth consecutive record for same-month freight volume, adding that December is the highest level for the month going back to 1996, when the index was established.

Looking at December load availability volumes, DAT observed that they increased: 19 percent for vans, 14 percent for refrigerated trailers, and 1.0 percent for flatbeds on a sequential basis, and they each headed up 41 percent, 65 percent, and 43 percent, respectively, annually.

And in the spot market rates for vans were up 5.0 percent for a monthly average of $1.95 per mile, which DAT said is the highest rate since it first started publishing these rates in 1999, with refrigerated and flatbed rates moving up 3.2 percent and 3.8 percent, respectively, sequentially. Annually, spot market rates were up 15 percent for vans, 6.7 percent for refrigerated, and 7.8 percent for flatbeds, said DAT.

David Schrader, senior vice president of DAT’s freight matching business, told LM that part of the reason for the increase in December spot market activity is related to how the holiday season was laid out, as there was one less week between Thanksgiving and Christmas, coupled with severe weather conditions in many parts of the country.

“It is not just about the holidays and weather, though,” he said, “we have seen abnormally strong freight volumes through the second half in total, which is not something we typically see. Some drivers for this have been energy and fracking, and increased automotive activity. There are a number of different sectors that have contributed, which makes it pretty broad-based in general.”

On a year-to-date basis in 2014, Schrader said that the momentum from 2013 has continued into this year, explaining that much of what occurs in the spot market is based on carrier behavior.

He explained this is comprised of ebbs and flows as freight gets tight carriers increasingly are searching for loads and posting their equipment. Conversely, when capacity is tight, brokers and shippers tend to do a lot of posting and searching, with carriers tending not to post their capacity and instead search in a similar manner.

“We are seeing a lot more of that behavior, where carriers are just not actively posting their capacity and are definitely as a result seeing some capacity tightening going on in the market, which is helping to drive spot market rate growth,” he said.

Regarding the motor carrier Hours-of-Service rule changes that took effect last July, Schrader said that the impact on available capacity of about 3-to-5 percent is not as bad as once was thought but noted there is still some effect there, explaining that anything that has the effect of limiting capacity-or make capacity less efficient– is going to drive up spot market rates.

Robert W. Baird & Co. analyst Ben Hartford wrote in a research note that the increased spot market activity in November and January saw demand for spot truckload capacity head up, due to weather-related disruptions, seasonal demand improvement, and ongoing driver regulatory constraints, adding that “Emerging volatility could support reaccelerating industry rate growth in 2014.”

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 · TransCore · All Topics
Latest Whitepaper
Efficiency improvements in Track/Trace Enhances Customer Loyalty
Consumer satisfaction with the quality of your products is clearly important, but the service you provide before and after the sale is equally important to any business, but often overlooked as benefiting the bottom line.
Download Today!
From the October 2016 Issue
Over the past decade we’ve seen a major trend in regards to safety regulations for freight transport within the United States as well as for import and export shippers—that trend is the “international­ization” of rules and regulations.
European Logistics Update: Post-Brexit U.K. moving ahead, but in which direction?
Badcock Home Furniture &more: Out with paper, in with Cloud TMS
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
How API Technology Connects the Transportation Economy
Dynamic decision making is made possible through accurate, actionable data. When combined with progress in data science and the Internet of Things, technology companies that add value to direct-to-carrier APIs and combine them with high-power data analytics will create new concepts for the information economy.
Register Today!
Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...

2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...