September edition of the DAT Truckload Volume Index sets new records

Even with a modest volume decline, September set new monthly highs, due to unprecedented market factors, specifically related to historic freight surges, a lack of driver availability, and equipment constraints, according to the most recent edition of the DAT Truckload Volume Index (TVI), which was released this week by DAT Freight & Analytics.

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.

September’s TVI reading—at 229—fell 1% from August. Despite the decline, this still marks the highest reading for any September on record, according to DAT. The TVI hit its all-time high in June, coming in at 237.

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

• the national average spot truckload van rate on the DAT One load board network, at $2.85 per mile (including a fuel surcharge), was up $0.09 over August, setting a new monthly record for the fifth time in 2021, topping the previous record, of $2.82, set in August;
• the national average spot reefer rate, at $3.25 per mile, was up $0.10 compared to August, while seeing a $0.68 cent annual increase, topping the previous record, of $3.15, set in August, and eclipsing the $3 per gallon mark for the fifth straight month;
• the national average spot flatbed rate, at $3.09 per mile, was up $0.01 over August and up $0.68 annually;
• contract rates, for all three equipment groups, each saw gains, with: the national average contract van rate up $0.03 compared to August, matching the national average spot van rate and also setting a new record; the contract reefer rate, at $2.97 per mile, up $0.03; and the average contract flatbed rate flat, at $3.30 per mile;
• the number of loads posted to the DAT network fell 1.5% in September, with truck posts off 4.5%; and
• the national average van load-to-truck ratio came in at 6.3, down from August’s 6.5 and above September 2020’s 5.4, and the reefer load-to-truck ratio fell from 14.9 in August to 13.5 in September, which DAT said matched up with seasonal declines for agricultural production, while the flatbed ratio at 47.9 was up from September’s 44.1, paced by single-family home construction, increases in oil and gas activity and Hurricane Ida recovery efforts

“Businesses are shipping early and, where possible, by truck in order to make sure they have inventory, but this means using the spot market or higher-priced carriers to cover their loads,” said Ken Adamo, DAT Chief of Analytics, in a statement. “If you’re accustomed to having the right truck in the right place at the right price, you can have one or two of those things but probably not all three.”

Adamo told LM in an interview that the slight volume decline, from August to September, did not come as a surprise when taking into account that September only has 30 days, which leaves one less day to move freight compared to some other months.

“There is no firm ceiling or an absolute maximum of freight that can be moved or charged,” he said. “It is like stocks or anything else, which have support levels. Something systemic would have to change for more freight to move or for rates to go higher. For the long-haul stuff, we have been stuck at the rates we are currently at for several months now, with some ticks up here and there, but by and large, there has not been huge upward movement.”

On the volume side, he said that truckload is moving about as much as it can. And much of that ties back to the myriad global supply chain issues that have been in the spotlight in recent weeks, he added.

As an example, there are items like exercise equipment and appliances that are expected to be ordered and move through the supply chain, whereas there have also been shortages items found in supermarkets and retail stores, which Adamo said are raising a lot of eyebrows.

Looking at Peak Season and October on a month-to-date basis, Adamo said it is reasonable to expect rates to stay where they are and maybe go up a little higher, especially towards the end of October.

“We are in that middle-mile phase right now, with cargo leaving the port being the first-mile,” he said. “It is all making its way through distribution networks and I am sure it will all pick up again. This is typically a lull, where you see that end of September into the first three weeks or so in October typically crater out a bit, as large private dedicated contract fleets move in. But the small carriers also had to pick up a lot of that. I think when you really start to see that is in early November. So, we might see rates ebb a little bit in November, but I would not be at all surprised if November and December set a high-water mark for many years to come. For every cent that rates go up, there is more and more resistance and that is what support levels really are…to claw at every penny higher and higher when you are already at all-time records is like stretching a rubber band that is already very stretched. When it is loose, it is easier to pull, and when it gets tighter, it gets harder to pull. Think about rates like that.”

Adamo said there is a possibility less freight may move in December, due to the Thanksgiving holiday and a shorter month, adding it would not be surprising, from a volume perspective, to see sequential declines in November, in advance of the December through the June-July period, which are typically the record months of the year.