DAT April Truckload Volume Index sees declines

The April edition of the DAT Truckload Volume Index (TVI), which was issued this week by DAT Freight & Analytics, largely saw declines, coming off a mixed March.

The DAT Truckload Volume Index reflects the change in the number of loads with a pickup date during that month, with the actual index number normalized each month to accommodate any new data sources without distortion, with a baseline of 100 equal to the number of loads moved in January 2015. It measures dry van, refrigerated (reefer), and flatbed trucks moved by truckload carriers.

DAT’s data highlighted the following takeaways for truckload volumes, load-to-truck ratios, and rates, for the month of April, including:

• the Van TVI was down 15.5% compared to March, to 233, and down 12.3% annually; the Reefer TVI was down 16.3% compared to March, to 154, and down 12.5% annually; and the Flatbed TVI was down 13.7% compared to March, to 239, and up 3.5% annually (DAT said that these marked the lowest van and reefer TVI numbers going back to February 2021, when a polar vortex and harsh winter storms severely impacted logistics activity across wide areas of the U.S. and Canada;
• the spot van rate—at $2.06 per mile—was $0.10 below March and down $0.71 annually;
• the spot reefer rate—at $2.41 per mile—was $0.09 below March and down $0.72 annually;
• the spot flatbed rate—at $2.67 per mile—was $0.04 below March and down $0.70 annually;
• line-haul rates, which subtract an amount equal to a fuel charge, fell $0.08 for van line-haul, to $1.59 per mile, compared to March, with reefer line-haul down $0.07, to $1.89 per mile, and flatbed line-haul down $0.02, to $2.10 per mile;
• the fuel surcharge was down$0.02, with van freight at $0.47 per mile, reefers at $0.52; and flatbeds at $0.57, with the April diesel average, at $4.10, down $0.11 compared to March;
• national average load-to-truck ratios saw declines, due to weaker demand for spot market truckload capacity, with van coming in at 1.9, down from March’s 2.0, and off compared to April 2022’s 3.4, for its lowest reading since May 2020, during the onset of the pandemic, with reefer at its lowest point since April 2020, coming in at 2.7, down from March’s 3.0 and down from 6.3 a year ago, and flatbed, at 12.1, even with March and down from 64.5 a year ago; and
• national average rates for contracted freight were lower from March to April, with the difference between contract and spot rates up to near all-time highs, at $0.62 for van freight, $0.60 for reefers, and $0.66 for flatbeds

“May will be pivotal for shippers, brokers and carriers,” said Ken Adamo, DAT’s Chief of Analytics, in a statement. “After a challenging first four months of the year, we expect to see the effects of seasonality on freight volumes and rates. The question is how sustainable those effects will be.”

And he added that the difference between spot and contract rates serves as what he called an indicator of where things stand in the freight cycle, as the balance of bargaining power among shippers, brokers, and carriers. What is needed to close that gap, he said, was for the supply of spot market trucks to diminish as more carriers exit the market, coupled with higher demand for trucks—or shippers with more loads than what was planned for.

DAT Principal Analyst Dean Croke told LM in an interview that in looking back at the last nine months there have been more trucks than loads in the spot market.

“I think that gap is closing very rapidly in the spot market,” he said. “And I say that because the best indicator of that is spot rates and they've been flat for three weeks now. All of April they were dead flat, and we kind of thought, ‘well is this the bottom?’ because diesel prices just dropped $0.10 cents per gallon, and that will give carriers some more runway to extend this lack of a profitable period they are in. Between now and Memorial Day is absolutely critical, in terms of determining which way the market goes.”

The reason for that, he explained, is that produce season is a key driver of activity over that period, for this time of year, in terms of the seasonality bump that occurs.

“You see a little bit of a bump from imports,” he said. “As Chinese New Year slowdown imports are up 16% in April and 4% higher than the previous five April's, which is significant. While people say volumes always go up in April on the import front, well compared to the last five, we are actually higher, at 2.1 million. That tells me that maybe the inventories have been drawn down and shippers are getting back to a normal seasonal buying pattern. That is one thing that happened. The other is produce season has started late, but it is starting. We had Hurricane Ian delay things in Florida, that we had the atmospheric rivers delay things in California by a few weeks. What's going to happen, we think, is growers are telling us that they'll be shipping. If they had 24 weeks of shipping time, they'll have to do it in 22 weeks…which could mean reefer capacity tightens. If you're trying to move the same volume, volume week-over-week, volumes are pretty flat.”

Looking at the load-to-truck ratios, Croke said the April readings are close to 2019 levels, which is why the current spot market activity resembles 2019 conditions. But with contract rates still pretty high, he noted that if you are a carrier and can get into the contract market, either as a lease on owner operator or get your own freight, it's still a very attractive freight market.