Spot market load volumes and rates trend down after an active March, reports DAT

By Jeff Berman, Group News Editor · April 9, 2020

On the heels of an active March, which largely saw notable gains for spot market load volumes and rates for van and reefer equipment, that were driven by various factors, including urgent orders, or restocking, of retail goods, due to the ongoing coronavirus pandemic, spot truckload volume and rates saw significant declines from March 30-April 4, according to data issued this week by Portland, Oregon-based freight marketplace platform and information provider DAT, a subsidiary of Roper Technologies.

For the week of March 30-April 4, DAT reported the following readings:

the number of posted loads fell 39% week over week;

the number of posted trucks on the spot market rose 13% week overt week for the largest gain in available capacity on a year-to-date basis;

the national average van rate per mile average, at $1.87, in March, is up 8 cents compared to the February average;

the national average reefer rate per mile average, at $2.19, in March, is up 10 cents compared to the February average;

the national average flatbed rate per mile average, at $2.19, in March, is up 4 cents compared to the February average;

from April 1-4, the average van rate was $1.85, with reefer at $2.09, and flatbed at $2.08

DAT officials noted that reefer rates have “given back a good portion of their March gains, adding that rates will fall below year-ago levels over the next 8-10 days, ahead of the typical seasonal uptick seen in early May. And national average load-to-truck ratios at 1.5, was down from 2.8 last week, while the reefer load-to-truck ratio dropped from 2.6 to 4.9, showing pricing power heading towards shippers.

In a DAT blog posting, the company explained that truckload demand is slowing as social distancing persists.

“Overall, the market appears to be in the midst of contraction,” the company said. “Load-to-truck ratios as well as rates have plummeted from the highs observed towards the end of March. Pinpointing the bottom for the market is a difficult and inexact science, so our approach is to offer frequent updates and insights as conditions change. Our best working assumption is that conditions should level out over the next couple of weeks and stabilize before certain regional upticks in shipping due to produce. The overall timing and flow of imports will play a large part in this, as will the policies around social distancing.”

In a March 18 interview, DAT Chief of Analytics Ken Adamo said that, at that time the spot market would be inundated for at least two weeks, due to issues relating to getting consumer goods, like paper products, to warehouses and distribution centers.

“There is enough backlog to keep carriers busy for the next two weeks,” he said. “There is also this midterm horizon in the early summer, which is in the middle of produce season. And things like Xboxes are going to start coming across the ocean mid-summer. There are all these traditional transportation fence posts we are watching, with a focus on if coronavirus is going to bleed into Peak Season and Black Friday later this year.”

Looking ahead, when people have been quarantined for 30-plus days, Adamo said it is very unclear as to where things will stand for carriers, shippers, and brokers, calling it a hard question to answer.

“What happens between now and produce season is concerning to me,” he said. “We are kind of on the foothills of it now. We are also suffering from the reaction to trade tensions with China about a year ago, when manufacturers and retailers buffered their inventories to prepare for potential trade disruptions, which led to there being a lot of inventory to draw down from. That leads to a question of what happens to all of this freight that is backlogged that is going to land in West Coast ports in [the coming weeks]?”

April 9, 2020