DAT: Seasonality chills July freight volumes, rates

Truckload freight volumes fell last month and national benchmark spot rates for refrigerated and dry van loads retreated from their June gains, according to recent report from DAT Freight & Analytics.

DAT’s Truckload Volume Index (TVI), a measure of loads moved during a given month, was lower in July for all three equipment types:

• Reefer TVI slipped to 169, 3.4% lower than in June but 1.2% higher year-over-year.
• Van TVI was 226, down 7.0% from June and 3.0% lower year-over-year.
• Flatbed TVI was 238, 12.8% lower compared to June but 3.5% higher year-over-year.

“Shippers faced service disruptions at the ports and in the less-than-truckload sector but were able to secure van capacity without causing the needle to move on spot rates and volumes,” Ken Adamo, DAT chief of analytics, said in a news release.

Despite month-over-month declines, the reefer and flatbed TVI numbers were the highest on record for July as fresh and frozen food, metals, machinery, construction materials, and other seasonal freight moved through supply chains.

Demand for trucks slows

National average load-to-truck ratios for van and reefer freight have been virtually unchanged for three straight months:

• The reefer ratio was 3.8 - unchanged from June and down from 7.2 a year earlier.
• The van ratio was 2.6, equal to June and down from 3.8 in July 2022.
• The flatbed ratio was 7.1, down from 9.7 in June and significantly down from 21.8 in July 2022.

Spot, contract rates dip

Reflecting flat demand, DAT’s benchmark spot rates slipped in July:

• The spot reefer rate dipped 3 cents to $2.44 per mile and 60 cents lower year-over-year.
• The spot van rate was $2.07 per mile, down 1 cent compared to June and 56 cents lower than in July 2022.
• The spot flatbed rate was $2.54 a mile, down 7 cents month over month and 72 cents lower year-over-year.

Line-haul rates, which subtract an amount equal to a fuel surcharge, declined as well, DAT reported. DAT’s benchmark reefer line-haul rate was $1.96 per mile, down 5 cents compared to June. The van line-haul rate fell 2 cents to $1.63 per mile and the flatbed line-haul rate dropped 9 cents to $2.01 per mile.

The average fuel surcharge increased by 2 cents to an average of 48 cents a mile for reefers, 44 cents for van freight, and 53 cents for flatbeds in July.

“Spot rates, as a reminder, are ‘all-in’ rates, meaning no separate fuel surcharge to help mitigate the risk of fuel price fluctuations,” Adamo said. “You have to negotiate each individual load with fuel and operating costs in mind, which is not always easy. The sudden increase in fuel prices is testing the wherewithal of small carriers at a time when freight volumes are in a seasonal lull.”

DAT’s benchmark rates for contracted freight strengthened compared to pricing on the spot market. The reefer rate gained 3 cents to $2.91 a mile, the van rate fell 1 cent to $2.57 a mile, and the flatbed rate rose 5 cents to $3.29 a mile.

After closing for three straight months, the spread between contract and spot rates was unchanged for van freight and increased by 6 cents for reefers and 12 cents for flatbed loads. The size of the gap is an indicator of bargaining power among shippers, brokers, and carriers, Adamo explained.