Understanding the Recent Trends in Truckload Freight Rates

Author: Logan Wright Updated: 09-18-2024 02:14 PM

Truckload Freight Volumes and Rates in August

Truckload freight volumes and rates took an interesting turn in August, showcasing a distinct separation in trends. With shipments on the rise and prices continuing to fall for the third consecutive month, insights from DAT Freight & Analytics shed light on this phenomenon. They administer the DAT One freight marketplace and the DAT iQ data analytics service, which provide valuable data on market trends.

Diverging Volume Index Trends

The DAT Truckload Volume Index (TVI), a significant marker for tracking loads transported each month, exhibited positive growth across all three equipment categories last month. The stats break down as follows:

Equipment Types Overview

Van TVI: 289, reflecting a strong 2.8% increase compared to the previous month.
Refrigerated (reefer) TVI: 220, marking a notable 4.3% improvement.
Flatbed TVI: 287, showing a modest rise of 0.3%.

Notably, van and refrigerated freight types experienced year-on-year growth. The van TVI surged by 6.3%, while the reefer TVI skyrocketed by 17.6%. Conversely, the flatbed TVI encountered a slight dip of 0.7% compared to August of the previous year.

Challenges in Truckload Rates

As is customary, August also proved challenging for truckload rates. Ken Adamo, the Chief of Analytics at DAT, highlighted that while linehaul rates showed positive year-on-year trends for the first time since March 2022, these statistics are little comfort for truckers seeking immediate pricing improvements.

Spot and Contract Rate Movements

August saw national average spot truckload rates declining across all equipment types when compared to July's performance:

Spot Van: $2.01 per mile, down by 5 cents.
Spot Reefer: $2.41 per mile, decreasing by 4 cents.
Spot Flatbed: $2.41 per mile, lowering by 7 cents.

For linehaul rates, the monthly averages were as follows: The van linehaul rate decreased to $1.60 a mile, dipping 3 cents month over month, but it remained 3 cents higher than in August of last year. The reefer rate witnessed a slight reduction of 2 cents to $1.96, still marginally higher year-over-year. Meanwhile, the flatbed rate fell to $1.92, reflecting a 5-cent dip but still 2 cents above the previous year's figures.

Contract Rates Under Pressure

Looking at freight moving under long-term contracts, rates also saw a downward trend compared to July:

Contract Van Rate: $2.40 per mile, reduced by 3 cents.
Contract Reefer Rate: $2.74 per mile, down 7 cents.
Contract Flatbed Rate: $3.08 per mile, also a 3-cent drop.

All contract rates across equipment types have been negative year-on-year since August 2022, emphasizing ongoing pricing pressures faced by truckload carriers. Roughly 85% of truckload freight is transported under contracts, marking it as a significant operational bearing in this industry.

Load-to-Truck Ratios in Decline

The national average load-to-truck ratios reflected a similar declining pattern across all equipment types:

Van Ratio: 3.6, down from 4.2 in July, indicating that for every van truck available, there were 3.6 loads on the DAT One marketplace.
Reefer Ratio: 6.0, decreasing from 6.5.
Flatbed Ratio: 9.8, down from 11.9.

These ratios are crucial as they illustrate the supply and demand dynamics in the truckload sector, directly influencing the pricing structure for spot freight.

Insights on the DAT Truckload Volume Index

The DAT Truckload Volume Index measures the change in load counts for pickups recorded in a month. Setting a baseline of 100 refers to the number of loads transported in January 2015, per DAT RateView, a respected truckload pricing database that evaluates an average of 3 million loads each month.

Benchmark spot rates offered by DAT derive from invoice data pertaining to hauls exceeding 250 miles, classified by pickup dates within the reported month. It's also important to note that linehaul rates deduct amounts equivalent to average fuel surcharges.

About DAT Freight & Analytics

Operating the largest truckload freight marketplace in North America, DAT Freight & Analytics also provides comprehensive data analytics services for the trucking sector. Shippers, brokers, carriers, and various organizations depend on DAT's insights drawn from over 400 million freight matches and a substantial database of annual freight market transactions totaling around $150 billion.

Founded in 1978, this organization forms a part of Roper Technologies (Nasdaq: ROP), an integral component of the Nasdaq 100, S&P 500, and Fortune 1000, with headquarters situated in Beaverton, Oregon.

Frequently Asked Questions

What does the Truckload Volume Index indicate?

The Truckload Volume Index (TVI) serves as a key indicator of the volume of loads transported in a specific month.

How have truckload rates changed recently?

Recent data indicates a decline in both spot and contract truckload rates, continuing a trend observed over the past months.

What are the implications of load-to-truck ratios?

Load-to-truck ratios represent the balance of supply and demand, influencing freight pricing in the market.

Who relies on DAT Freight & Analytics data?

DAT's data is widely utilized by shippers, transportation brokers, carriers, and industry analysts seeking market trends and insights.

What is Roper Technologies' connection to DAT?

DAT is a business unit of Roper Technologies, which is listed on the Nasdaq and included in several financial indices.

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