DAT: Could a Pivotal Month for Truckload Freight, Charges – Fleet Administration

Truckload freight volumes dropped and nationwide common spot charges for dry van and refrigerated hundreds fell for the fourth consecutive month in April, mentioned DAT Freight & Analytics, which operates a serious on-line freight market and the DAT iQ knowledge analytics service.

The DAT Truckload Quantity Index, a measure of hundreds moved throughout a given month, was decrease for all three tools sorts:

• Van TVI was 206, down 15.5% from March and 12.3% decrease yr over yr.
• Reefer TVI fell to 154, a 16.3% decline from March and 12.5% decrease yr over yr.
• Flatbed TVI was 239, 13.7% decrease in comparison with March however 3.5% greater yr over yr.

DAT reviews it’s not uncommon for truckload freight volumes to say no from March to April. Nonetheless, the van and reefer index numbers have been the bottom since February 2021, when a polar vortex and unprecedented winter storms disrupted logistics exercise throughout giant areas of the US and Canada.

“Could might be pivotal for shippers, brokers, and carriers,” mentioned Ken Adamo, DAT’s chief of analytics. “After a difficult first 4 months of the yr, we anticipate to see the results of seasonality on freight volumes and charges. The query is how sustainable these results might be.”

Truckload Demand and Pricing

Nationwide common load-to-truck ratios decreased, indicating weaker demand for truckload capability on the spot market. The final time van and reefer ratios have been this low was in Could and April 2020, respectively, through the provide chain shocks of the pandemic:

• Van ratio: 1.9, down from 2.0 in March, and three.4 in April 2022. 
• Reefer ratio: 2.7, down from 3.0 in March and 6.3 yr over yr.
• Flatbed ratio: 12.1, down from 12.1 in March and 64.5 yr over yr.

This decrease demand for truckload companies led to a drop in nationwide common spot van and reefer charges:

• The spot van fee averaged $2.06 per mile, down 10 cents in comparison with March and 71 cents decrease yr over yr.
• The spot reefer fee fell 9 cents to $2.41 a mile, 72 cents decrease than in April 2022.
• The spot flatbed fee dipped 4 cents to $2.67 a mile, down 70 cents yr over yr.

Line-haul charges, which subtract an quantity equal to a gas surcharge, continued a sample of month-over-month declines in 2023. The nationwide common van line-haul fee was $1.59 per mile, down 8 cents in comparison with March, whereas the reefer line-haul fee fell 7 cents to $1.89 a mile. The common flatbed line-haul fee was $2.10 a mile, down 2 cents.

Gas surcharge quantities fell 2 cents to a median of 47 cents a mile for van freight, 52 cents for reefers and 57 cents for flatbeds. At $4.10 a gallon, the worth of diesel was 11 cents decrease in comparison with March.

Will Seasonality Kick In?

Nationwide common charges for contracted freight have been decrease in April in comparison with March, however the unfold between contract and spot charges rose to close all-time highs: 62 cents for van freight, 60 cents for reefers and 66 cents for flatbeds. 

Adamo known as the unfold between spot and contract charges “an indicator of the place we’re at within the freight cycle — the stability of bargaining energy amongst shippers, brokers, and carriers.”

For the hole to shut, two issues have to occur, he mentioned.

“One, the availability of vehicles on the spot market must diminish, which sadly means extra carriers exiting the market. Two, there must be greater demand for vehicles — in different phrases, shippers with extra hundreds than they deliberate for.

“In 2016 and 2019, it was exactly the third week in Could when the spot market entered a restoration section after extended declines and stagnation,” he defined. “Seasonality kicked in and shippers wanted extra vehicles to maneuver contemporary produce, building supplies, imports and summer time and back-to-school retail items. If we see an uptick in demand earlier than Memorial Day, it will likely be a welcome signal for owner-operators and small carriers as we head into the summer time and fall.”