Market rates skyrocketed during August
Published on: September 17, 2020
The DAT Truckload Volume Index, a measure of dry van, reefer and flatbed loads moved by truckload carriers, rose 1.1% from last month and is 0.8% higher than August 2019.
“Volatility in shipper networks due to shifting consumer purchasing spilled over to the freight market. For instance, commercial food service is way down, but grocery purchases are up,” said Ken Adamo, chief of analytics at DAT. “Asset-based carriers continued to honor their committed volumes but didn’t necessarily provide additional surge capacity. As a result, the number of available loads increased, and prices rose to attract additional capacity.”
Van freight on an atypical path
Nationally, the August load-to-truck ratio for vans rose for the fourth straight month to 5.3, meaning there were 5.3 available loads for every available truck on the DAT network. The van load-to-truck ratio was 20% higher compared to July and more than double the ratio in August 2019 (2.3).
DAT Freight Outlook/ What to expect
- Weather and wildfires are likely to have an impact on supply chains in the near term, disrupting regular freight networks and creating a higher rate environment due to constraints on capacity. Hurricanes can lead to a tightening of flatbed capacity as machinery and building supplies are needed for recovery efforts.
- Tight intermodal capacity and substantial rail surcharges at West Coast ports may force smaller shippers to consider switching to long-haul truckload carriers, especially out of Los Angeles and Long Beach. This would put further strain on spot market van capacity.
- DAT iQ, the company’s analytics business, now incorporates insights on contract truckload freight from DAT’s Freight Market Intelligence Consortium (FMIC), acquired in June. FMIC’s Pulse Signal report in August concluded that while July contract freight volumes were flat, shippers increased their load volumes on the spot market from 12-15% on average to approximately 21%. This is a reflection of volatile demand for truckload capacity and of supply chains remaining out of balance.