According to DAT, its North American Freight Index saw its highest-ever volume for the month of January— jumping up 42% compared to a year ago.
“Freight volume was unusually robust for the season, exceeding December levels by 24%, and marks the first time since the Freight Index began when freight availability increased from December,” said the company. “Over the past ten years, there has been a 13% average decline [seen] in freight levels between those two months.”
The monthly DAT North American Freight Index reflects spot market freight availability on DAT’s network of load boards covering freight movements in the U.S. and Canada.
DAT said that, on a month-over-month basis, the “unusual trend in freight availability” affected the three major equipment types to differing degrees:
· Van loads increased 16%
· Refrigerated freight volume rose 14%
· Flatbed freight availability climbed 28%
And compared to January 2012, freight volume increased 36% for vans, 32% for reefers, and 7.9% for flatbeds.
As to rates, despite strong freight volumes, DAT advised that “truckload capacity remained relatively loose on the spot market, so rates followed a somewhat typical seasonal pattern of a January decline that was most significant for vans and flatbeds.”
The company said that van rates fell 2.4% and flatbed rates slipped 2.0%, not including the fuel surcharge. Reefer rates, however, remained stable in January compared to December. “On a year-over-year basis, van rates declined 2.4%, flatbeds lost 5.7%, and reefer rates rose 8.6%.”
Rates are derived from national averages in the DAT Truckload Rate Index, and exclude fuel surcharges. Spot market rates are paid by brokers and 3PLs to the carrier, DAT noted.
Looking into this month, DAT industry pricing analyst Mark Montague advised that “rates are trending up on the spot market. This is a surprising move, in what is typically the slowest month of the year. Van and flatbed rates are up, but reefer rates are declining as expected. Reefers seem to have hit bottom, though, as rates are stabilizing now; they will likely begin to rebound next month.’
David Schrader, senior vp of DAT's freight-matching business, told FleetOwner that “Mark Montague sees extraordinary things happening, with higher levels of exports to Brazil, China, and Mexico. Much of this export freight is industrial freight, which tends to be spot-market freight.
"Also, “ continued Schrader, per industry reports the 'contract marketplace'— i.e., freight shippers directly contracting loads out to carriers— shrank by 2.5% in January. This would have forced capacity into the spot market, which, while robust, is smaller than the contract marketplace. The net-net of all this is that loads as well as trucks [capacity] greatly increased on the spot market in January."
Schrader observed that the net impact on spot-market rates through most of January was negative “as the excess capacity in the marketplace competed for available loads. Regarding contract rates, in January it appeared that shippers were cautious about committing to higher contract rate volumes due to conflicting signals about consumer demand.
“Additionally,” he continued, “when fuel prices increased recently, carriers realized the need to adjust pricing. That is contributing to higher fuel surcharge numbers [calculated]in most regions of the U.S, with the result that the overall net rate rising."
According to Schrader, the spot market can experience growth even when freight volume is contracting. “Generally speaking, it's not unheard of,” he said. “The spot market often absorbs the effect of a mismatch between demand and available capacity in the larger freight market. This mismatch can occur because of unexpected or large-scale changes in the freight marketplace or even in the economy. Specific markets, regions and/or equipment types may be affected disproportionately, or there may be a broad trend among shippers to respond to economic conditions in a certain way."
DAT, a TransCore business unit, serves brokers, carriers, owner-operators and shippers with products and services, including its network of load boards and its Truckload Rate Index for spot and contract markets rates.
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