DAT reports stellar spot market activity in June

Recent spot market data issued by Portland, Oregon-based freight marketplace platform and information provider DAT, a subsidiary of Roper Industries, reinforces the current strength of the trucking sector, with June having the highest spot market rates on record.

DAT said that the national averages for van, flatbed, and refrigerated (reefer) were the highest ever recorded in its DAT Trendlines readings, with spot market averages on the flatbed and reefer side higher than average shipper contract rates for each segment and the average spot van rate equal to the average contract van rate.

What’s more, DAT noted that the end of the second quarter kept pressure on prices, coupled with shippers’ need to get shipments in place in advance of July 4 and subsequently led to higher rates in 82 of the top 100 van lanes and large increases in most van markets.

“The more you get into the details and data, the more you see that this is not a typical year,” said Mark Montague, DAT analyst, in an interview. “There are markets that are hot that we did not expect to be hot. For example, Florida was pretty strong for freight throughout June, and usually the produce harvests are done in Miami and Lakeland at the end of May. It is hard to say why.”

This was highlighted in the top markets for reefer spot market load posts through June, with Miami now at 10 compared to 40 a year ago at the same time and Lakeland at number 8 compared to 27 a year ago.

Atlanta was the top reefer market through June as was the case a year ago, followed by Elizabeth, N.J. (number 2 last year), Dallas (number 4 last year), and Houston (number 8 last year), rounding out the top five.

DAT said that high demand and tight truckload capacity are the main drivers for what it called “unprecedented numbers of reefer load posts” on its load boards. What’s more, it said that no reefer market saw more than 1 million outbound load posts in 2017, while in 2018 the top three markets are on track to do so.

Spot market reefer rates in June were up 6.3% from May to June and up 30% annually.

Van loads, said DAT, have benefitted from very high demand and tight truckload capacity as well, with DAT noting that load posts by brokers and shippers on pace to set myriad records.

The Atlanta market, according to DAT, is currently on pace to top 2 million loads in 2018 and remains the top market for van load posts, with Charlotte second (number 3 last year), Houston third (number 2 last year), Memphis fourth (number 7 last year) and Dallas fifth (number 4 last year).  Van rates are up 44% from May to June and 76% annually.

Flatbed rates are up 3.7% from May to June and 31% annually.

Montague said these numbers present a working thesis that things are rolling along with no visible end in sight.

“It is really one of the most remarkable freight periods since deregulation in 1980,” said Montague. “The question is where do you find truck drivers and capacity to restore more equilibrium. How do you get back to that?”

Addressing the tight capacity, Montague said it is important to remember that demand peaks before rates peak, with rates tending to stay up, even as things start to cool off at times, depending on sector. Reefer, he said, is an example of that, as there is now less urgency compared to before July 4.

One specific “hot” market in the U.S. identified by Montague, which he said is a “landing strip for the country.” That was made clear, with the top three rate increases occurring on Memphis lanes: Memphis to Chicago was up $0.38 to $3.47 per mile; Memphis to Indianapolis was up 37 cents to $3.34 per mile; and Memphis to Columbus was up 37 cents to $3.49 per mile.

“This is due, in part, to its central location and e-commerce activity,” he said.

Looking ahead, Montague said that August’s data will be very telling in light of recent trade and tariff developments, adding that it remains to be seen if it will slow down the strong market, as there are a lot of domestic drivers like oil and gas and pipeline construction that are doing very well with many projects underway in the southeastern U.S.