LM    Topics     Logistics    3PL

‘Urgent restocking’ continues to boost truckload spot rates and loads, reports DAT


Spot market load volumes and rates for van and reefer equipment saw mostly significant gains, for the week of March 16-March 22, brought on by urgent orders, or restocking of retail goods, due to the ongoing coronavirus pandemic, according to data issued by Portland, Oregon-based freight marketplace platform and information provider DAT, a subsidiary of Roper Technologies.

The firm explained that this is being driven by an ongoing pattern that is seeing “anxious shoppers [buying] as much as they can on each trip,” adding that “retailers, including e-commerce outlets, reply increasingly on spot market providers to re-stock shelves at a moment’s notice, while truckers report long wait times at pickup and delivery points.”

For the week of March 16-March 22, DAT reported the following annual differences:

  • spot load posts are up 4.6%;
  • spot truck posts are up 2.4%;
  • van load-to-truck ratio is up 11.4%;
  • van spot rates are up 5.6%;
  • flatbed load-to-truck ratio is down 16.2%;
  • flatbed spot rates are up 0.8%;
  • refrigerated (reefer) load-to-truck ratio is up 26.1%; and
  • reefer spot rates are up 7.5%

In a recent interview with LM, Ken Adamo, Chief of Analytics at DAT, said that national dry van spot market rates were currently up 5%-to-7% (as of March 18) through mid-month, which he called a substantial increase, given where things are seasonally from an overall rate climate perspective, and are not showing any signs of letting up from an empirical perspective either.

Other contributing factors he cited included declining diesel prices and a 3.15-to-1 load-to-truck ratio (as of March 15).

“2020 is kind of closely following 2017 as a way for us to model things off of a prior year,” he said. “In the past three weeks, things have fundamentally decoupled from 2017 and shot upward. The differences between 2017 and 2018 are with 2018 arguably being the high water mark of the decade. We are not there yet, but we are maybe halfway there. The next couple of weeks will be important to watch, but what we are seeing is that will mainly be driven by load volume, and the past week was a near vertical spike in load volume for posted loads in our network and our extended network.  The working thesis is that capacity has not left the market but is being sucked up by large contract truckload shippers and are not using the spot market.”

Addressing the current load-to-truck ratio, Adamo said that it is decoupled from 2017 and operating in a space that is significantly higher than 2019 and setting its sights on 2018 levels.

“There is still a way to go, with the coming weeks being imperative, as spring shipping and produce for reefers with produce season, so we could see a compounding effect here in the next couple weeks for load-to-truck ratios,” he said. “What is happening there is apparent on the rate side, where we are seeing unmitigated increases.”

When asked about reduced consumer demand due to the coronavirus, Adamo said that in the short term the spot market is going to be inundated over the next two weeks at least, with issues relating to getting consumer goods, like paper products, to warehouses and distribution centers.

“There is enough backlog to keep carriers busy for the next two weeks,” he said. “There is also this midterm horizon in the early summer, which is in the middle of produce season. And things like Xboxes are going to start coming across the ocean mid-summer. There are all these traditional transportation fence posts we are watching, with a focus on if coronavirus is going to bleed into Peak Season and Black Friday later this year.”

Looking ahead, when people have been quarantined for 30-plus days, Adamo said it is very unclear as to where things will stand for carriers, shippers, and brokers, calling it a hard question to answer.

“What happens between now and produce season is concerning to me,” he said. “We are kind of on the foothills of it now. We are also suffering from the reaction to trade tensions with China about a year ago, when manufacturers and retailers buffered their inventories to prepare for potential trade disruptions, which led to there being a lot of inventory to draw down from. That leads to a question of what happens to all of this freight that is backlogged that is going to land in West Coast ports in 30-45 days?”   


Article Topics

News
Logistics
3PL
Transportation
Motor Freight
3PL
DAT
loads
Logistics
Motor Freight
Rates
Spot Market
Transportation
Trucking
Trucking Rates
   All topics

3PL News & Resources

Prologis and Home Depot leadership address the capabilities of AI for logistics
ShipStation report examines holiday season shopping preferences
UPS preps to acquire MNX Global Logistics
Prologis research paper examines impact of various technologies on logistics real estate efficiency
Logistics services providers and shippers call out for seasonal help
National weekly diesel average falls for first time in nine weeks, reports EIA
FTR Trucking Conditions Index sees sequential improvements
More 3PL

Latest in Logistics

Prologis and Home Depot leadership address the capabilities of AI for logistics
ShipStation report examines holiday season shopping preferences
UPS preps to acquire MNX Global Logistics
Prologis research paper examines impact of various technologies on logistics real estate efficiency
Logistics services providers and shippers call out for seasonal help
National weekly diesel average falls for first time in nine weeks, reports EIA
FTR Trucking Conditions Index sees sequential improvements
More Logistics

About the Author

Jeff Berman's avatar
Jeff Berman
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review and is a contributor to Robotics 24/7. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis.
Follow Modern Materials Handling on FaceBook

Subscribe to Logistics Management Magazine

Subscribe today!
Not a subscriber? Sign up today!
Subscribe today. It's FREE.
Find out what the world's most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today.

September 2023 Logistics Management

September 6, 2023 · Logistics operations are facing a human capital crisis that poses a threat to both performance and competitiveness. In this year’s study, our authors explore how organizations can compete for talent in an increasingly limited talent pool; how organizations are competing in an increasingly dynamic business environment; and examine the technologies that shippers now need to use to stay ahead of the curve.

Latest Resources

Do More with the Same in Logistics and Distribution
Download this new white paper to learn best-practice strategies that can help your company do more with the same — optimizing your workforce to weather the current economic climate and pave a successful path forward.
Managing Global Complexity for the Long Term
Motor Freight Special Issue: Finding a way back to “normal”
More resources

Latest Resources

Driving ROI with Better Routing, Scheduling and Fleet Management
Driving ROI with Better Routing, Scheduling and Fleet Management
Improve efficiency and drive ROI with better vehicle routing, scheduling and fleet management solutions. Download our report to find out how.
Your Road Guide to Worry-Free Shipping Between the U.S. and Canada
Your Road Guide to Worry-Free Shipping Between the U.S. and Canada
Get expert guidance and best practices to help you navigate the cross-border shipping process with ease. Download our free white paper today!

Warehouse/DC Automation & Technology: It’s “go time” for investment
Warehouse/DC Automation & Technology: It’s “go time” for investment
In our latest Special Digital Issue, Logistics Management has curated several feature stories that neatly encapsulate the rise of automated systems and...
Why accurate, real-time location data is a must for efficient operations
Why accurate, real-time location data is a must for efficient operations
Find out how next-generation workforce management apps use accurate, real-time location data to power successful operations in this webinar with Radar CEO...
Should you lease or buy your lift truck fleet?
Should you lease or buy your lift truck fleet?
Leasing critical equipment like lift trucks can offer flexibility, but some lease terms can be complex and costly if you’re not...