The for-hire trucking sector received mostly good news among August’s market reports.
Seasonally adjusted freight volumes trended up. Average spot market rates maintained some of the first year-over-year increases in years for three major equipment types. Transportation unemployment held steady.
On the other hand, DAT Freight & Analytics reported that average contract rates were down both month over month and year over year for three equipment types.
See also: McLeod’s no-nonsense trucking economic outlook
Here’s a breakdown of the trucking industry’s health in August, according to the latest market reports:
Overall and contract freight: Loads up, rates down
For the contract sector specifically and for-hire trucking generally, freight volumes trended up slightly—but rates fell across the board.
Freight volumes moved up
The American Trucking Associations’ seasonally adjusted Truck Tonnage Index rose 2 points in August to 115.8, up 1.8% from July.
“August tonnage levels rose to the highest level since February 2023,” Bob Costello, ATA chief economist, said. “Not only does the latest robust gain show freight levels are coming off the bottom, but so does the sequential pattern over the last eight months. Starting earlier this year, every time tonnage falls, it is higher than the previous low.”
The ATA Truck Tonnage Index is based on ATA member surveys. It mostly represents contract freight and some spot market freight. A score of 100 on the index represents 2015's recorded volume.
The ATA Truck Tonnage Index recorded a volatile 2024 so far. On average, ATA’s initial index score changed by 2.2% each month. January’s index score brought the biggest decrease, falling 3.5% from the previous month. In February the score immediately made its most dramatic increase, rising 4.3%.
The Bureau of Transportation Statistics’ own measure of seasonally adjusted freight volumes, also called the Truck Tonnage Index, increased by 0.1 points (0.08%) to 113.9. Under BTS's measure, a score of 100 also equals 2015's volume.
ACT Research's For-Hire Trucking Index also found significant improvement for overall freight volumes. ACT Research's index shares a monthly measure of seasonally adjusted market changes, based on surveyed carriers. A score above 50 represents growth, while a score below 50 represents degradation.
ACT's Volume Index increased by 4.8 points to 54.5 in August. The market data and analysis firm attributed the volume improvement to growing goods demand and inventory pre-positioning—partially motivated by looming East coast port strikes.
“The improvement reflects both growing goods demand and inventory pre-positioning," Carter Vieth, research associate at ACT Research, explained. "Consumption of durable goods rose 4.2% q/q SAAR in Q2, imports and inventories are growing, and cross-border shipments are increasing. Though, pre-positioning ahead of potential east coast port strikes is part of the story.”
Contract rates fell
While freight volumes moved up, rates moved down.
DAT Freight & Analytics, which operates DAT One, found average contract rates moved down for all its three major equipment types. Van contract rates for August averaged $2.40 per mile, down 3 cents from July. Reefer rates averaged $2.74, down 7 cents month over month. Flatbed contract rates averaged $3.08, down 3 cents from the previous month.
DAT noted further bad news for all three equipment types’ monthly average contract rates: since August 2022, each monthly average rate remained year-over-year negative.
ACT Research's For-Hire Trucking Index found a similar degradation for overall rates. The firm's seasonally adjusted Pricing Index fell 3.3 points in August, down to 48.5. The Pricing Index remained below 50 (a state of degradation, by ACT's measure) since 2022—the only exception was July's at an index score of 51.8.
Excess capacity continues to be one of the primary influences keeping rates low. ACT Research notes that capacity additions are slowing down, though Class 8 tractor purchases were elevated. ACT noted that it sees "positive momentum for freight rates in the coming months," though this improvement will likely be gradual as capacity remains high.
Spot freight: Loads, rates both up year over year
The spot market’s volume and rates both performed better this August than last year’s, according to DAT. While average spot rates appeared lower than July’s, the August rates’ year-over-year comparisons brought happier news.
DAT’s Truckload Volume Index, measuring loads moved in a given month, increased month over month for the three major equipment types. Dry van and refrigerated TVIs saw stunning year-over-year increases, rising 6.3% and 17.6%, respectively.
See also: DAT: Truckload volume, rates diverge in August
Dry van’s TVI for August was 289, up 2.8% month over month and up 6.3% year over year. The refrigerated TVI reached 220, up 4.3% from the previous month and up a sharp 17.6% from the previous year. The flatbed TVI hovered around 287, up 0.3% from the last month but down 0.7% from last year.
Average spot linehaul rates measured by DAT, meanwhile, brought the same news for all three equipment types: month-over-month rate declines, but year-over-year rate improvements.
Average dry van spot linehaul rates (excluding fuel surcharges) in August were $1.60 per mile, down 3 cents from July but up 3 cents from last year’s August. Reefer rates fell to $1.96, down 2 cents month over month but up by 1 cent year over year. Flatbed rates averaged $1.92, down 5 cents from the previous month but 2 cents higher than August 2023’s average.
Average spot linehaul rates consistently trended down year-over-year from mid-2022 through mid-2024. This August’s year-over-year rate improvements, though relatively minor, remain a positive development.
Transportation unemployment steady
The Bureau of Transportation Statistics’ monthly transportation sector unemployment rate remained steady at 4.8% in August, dropping 0.9 percentage points from July but dropping only 0.1 percentage points from the same month last year.
The U.S. transportation unemployment rate is still higher than the overall U.S. unemployment rate, which rose by 0.5 percentage points to 4.4% in August.
The BTS transportation unemployment rate includes other modes of transportation and underrepresents sole proprietors, such as owner-operators. Transportation unemployment roughly follows overall U.S. unemployment but has trended slightly higher than overall unemployment since the pandemic.
ACT Research's Driver Availability Index, meanwhile, remains high. The firm's measure of driver availability rose to an index score of 55.4 in August, up from 53.1 the previous month, signaling that the hiring market is far from a shortage. ACT's Driver Availability Index has remained above 50 since 2022.
