Soft spot market sees seasonal declines in April, reports DAT

Keeping in line with seasonal patterns, data issued by Portland, Oregon-based freight marketplace platform and information provider DAT, a subsidiary of Roper Industries, in its DAT North American Freight Index, found that spot market freight volume and demand patterns edged down in April.

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

Spot market freight volume saw a 3.4 percent decline from March to April, DAT said. And spot truckload freight availability in April was off 8.9 percent for dry vans, with reefer and flatbed volume down 9.4 percent and up 3.9 percent, respectively. Spot market line-haul rates dropped 1.5 percent for vans, while reefers fell 0.6 percent and flatbed rates headed up 1.2 percent from March to April. 

On an annual basis, DAT said that over all spot market freight availability dropped by 30 percent in April, with annual declines intact going back to January 2015, with DAT citing lower demand for transportation services in the spot market and readily available truck capacity as the drivers for the ongoing declines.

On the demand side, DAT said April van demand sank 38 percent, with reefers off 34 percent, and flatbeds off 22 percent annually. And line haul rates were off 16 percent for vans, 12 percent for reefers, and 8 percent for flatbeds on an annual basis.

A 41 percent, or $0.12, fuel surcharge decline spurred a drop on total carrier revenue per mile, with line-haul rates for vans off 16 percent for vans, 12 percent for reefers, and 8 percent for flatbeds in April on an annual basis. DAT explained that the total rate is comprised of the line-haul rate and the fuel surcharge that is pegged to the retail cost of diesel fuel.

With capacity widely available and demand tempered by myriad signals of a slowing economy that is being hindered by things like sluggish GDP and retail spending, still-high inventories, and industrial production down, these factors have translated into a downward spot market, in addition to typical seasonal slowness for this time of year.

Stifel analyst John Larkin observed in a research note that truckload spot market pricing remains soft, adding that the contract pricing environment has deteriorated, while lower fuel surcharges remain positive for shippers and negative for carriers. On the LTL side, he said spot market pricing remains soft and contract pricing is still increasing, but at a decreasing rate, while lower fuel surcharges are a plus.