DAT Truckload Volume Index sees May rates rise

Despite some mixed readings, the May edition of the DAT Truckload Volume Index, which was recently issued by DAT Freight & analytics, an online marketplace for spot market truckload freight, tuned in another strong month of performance.

The DAT Truckload Volume Index (TVI) 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 reported that May spot truckload volume rates hit a new record, even though volume declines from April to May, which the firm said is an indication that “transportation networks are not growing fast enough to keep up with demand.” With the May Truckload Volume Index coming in at 212, that marked a 6% decline compared to April, while still marking the fourth highest month on record.

DAT’s data found the following takeaways for truckload volumes, load-to-truck ratios, and rates in May:

• the national average spot truckload van rate on the DAT One load board network, at $2.69 per mile (including fuel surcharge), was up 10 cents compared to April, hitting its highest monthly average van rate on record;
• the national average spot reefer rate, at $3.11 per mile, was up 18 cents compared to April, topping the $3 per mile mark for the first time, and the national average spot flatbed rate, at $3.13 per mile, saw a 17-cent gain over April, also topping the $3 per mile mark for the first time
• the number of van and reefer loads moved on the DAT network fell 6% in May, and the number of flatbed rates down 9%;
• the national average van load-to-truck ratio, for May, came in at 6.1, with 6.1 available loads for every van posted on the DAT network, ahead of April’s 4.8, with the reefer ration moving up from 9.9 to 13.0 and flatbed turning in its highest flatbed freight monthly average ratio, at 97.1, the highest reading going back to April 2018

DAT highlighted various drivers for constricted May freight volumes, which included dwell times rising in May, leaving carriers effectively unavailable for dispatch as they waited for trucks to be loaded or unloaded. Other drivers it cited were a surge in imports leading to chassis trailers in high demand, coupled with drayage rates rising, as well as the length of haul from ports to warehouses. And it also pointed to the cost of wood pallets has more than doubled due to rising lumber prices. A pallet shortage is threatening the ability of produce distributors to move products at a time when harvest activity is increasing.

“Imbalances and shortages plague supply chains across most segments of the industrial and consumer economies,” said Ken Adamo, Chief of Analytics at DAT Freight & Analytics. “For many businesses, ‘on-time and in-full’ shipments are essential to the efficiency and accuracy of their logistics operation. Right now, shippers are having to choose one or the other.”

In a recent interview, Adamo told LM that with both spot and contract rates high, with price exploration shippers are typically trying to find a bottom.

“If you talk to enough shippers, they will tell you that they are just trying to find a price in which they can get that handshake to get a contract in place to find some stability among their carrier base,” he said. “They are really just trying to get rates in place for which they feel reasonably confident can stick for three, six, or maybe even nine months and hoping to get some relief ahead of peak.”

“I think the story of the first half of the year is pretty much written at this point,” he said. “It is going to be very strong. My guess is that it will probably set every first half record we have ever seen for the spot market. In 2020, all of the activity pretty much happened in the second half of the year, starting over the summer, when stimulus checks started coming and people made investments into durable stuff like exercise equipment.”

As for the second half of the year, he said more needs to be determined such as how the tropical season goes, growing escalation in the Middle East as it relates to diesel prices, and what the retail shipping season is going to look like, among others.  

Looking at June, DAT observed that on the shipping calendar, “June exerts the most seasonal pressure on truckload rates, with the exception of Black Friday. And it added that Southern U.S. states are currently in the middle of peak produce season, with Northern states approaching it.

“Retailers are gearing up for summer and back-to-school shopping,” said DAT. “Construction activity increases demand for flatbed equipment.”