Spot market volume growth continues to impress, reports DAT

Spot market freight volumes for the month of August remained elevated compared to seasonal norms, according to data issued this week Portland, Oregon-based freight marketplace platform and information provider DAT.

The company reported that spot market freight volume in August was up 32 percent annually, while increasing 0.4 percent from July to August.

On an annual basis, DAT reported that freight volume headed up in August for each of the three equipment categories it tracks, including:
-vans up 36 percent annually and 0.2 percent compared to July;
-refrigerated (reefer) up 31 percent annually and up 6.2 percent compared to July; and
-flatbed up 56 percent year-over-year and down 2.4 percent compared to July

As for rates, DAT said that national average spot truckload rates were up annually, as van and flatbed rates were up 14 percent annually and reefer rates headed up 5.7 percent. From July to August, rates were down mildly, with van and reefer rates down 1.9 percent and 2.2 percent, respectively, and flatbed rates falling 0.5 percent. 

A general consensus for the ongoing strength in the spot market––for both volume and rates––among industry stakeholders is tied 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 needing to turn to brokers in the spot market.

KeyBanc Capital Markets analyst Todd Fowler wrote in a research note that dry van spot market rates have “moderated sequentially” as trucks returned to the market after Labor day and are strong on an annual basis, specifically for dry van and flatbed.

“Trends in our view suggest stable underlying demand and ongoing capacity constraints (drivers, regulations, rail service), and we expect rates to build in the coming weeks, with anecdotal commentary suggesting structural capacity constraints are unlikely to abate near term,” Fowler noted.

Mike Regan, Chief Relationship Officer at TranzAct Technologies, said in a recent interview that current trends on the spot market are strong, as the DAT data indicates
But he noted the underlying reasons as to why that is the case are not always prescient.

“Some people point to a stronger economy, but it might have more to do with the discipline of the carriers in terms of how they run their equipment and maintain strong pricing,” he said. “More carriers can make more money running fewer trucks, a carrier CEO recently told me. And call-to-haul factors for each piece of equipment are running especially strong and allowing them to maintain discipline on the pricing side. I don’t know if the gains we are seeing are as much a product of demand as they are of pricing.”