While spot truckload rates saw further gains in May, volumes moved in the other direction, according to the new edition of the DAT Truckload Volume Index, which was released this week by DAT Freight and Analytics.
The DAT Truckload Volume Index reflects the change in the number of loads with a pickup date during that month, with the actual index number normalized each month to accommodate any new data sources without distortion, with a baseline of 100 equal to the number of loads moved in January 2015. It measures dry van, refrigerated (reefer), and flatbed trucks moved by truckload carriers.
The May Van TVI, at 233, fell 9% compared to April and was down 8.3% annually, reported DAT. The Reefer TVI, at 172, was down 10% compared to April and off 15.7% annually, while the Flatbed TVI, at 267, was down 14% compared to April and down 14.7% annually.
DAT’s data highlighted the following takeaways for truckload volumes, and rates, for the month of May:
- the national average spot van rate was up $0.22 sequentially and $0.90 annually, to $2.89 per mile;
- the national average spot reefer rate was up $0.24 sequentially and up $0.99 annually, to $3.35 per mile;
- the national average flatbed rate increased $0.19 sequentially and $1.07 annually, to $3.65 per mile;
- fuel surcharges remained high, with van at $0.73 per mile, reefer at $0.79 per mile, and flatbed at $0.87 per mile;
- average van linehaul rose $0.20, to $2.16, reefer was up $0.22, to $2.56, and flatbed increased $0.17, to $2.78; and
- the contract van rate, at $2.92 per mile, rose $0.07 over April, and the contract reefer rate, at $3.28 per mile, headed up $0.06, and the contract flatbed rate, at $3.77 per mile, headed up $0.06
DAT highlighted various factors impacting capacity availability in May: the CVSA International Roadcheck inspection blitz Memorial Day weekend, and ongoing immigration enforcement that it said continues to shrink the available driver pool.
“Last month’s lower volumes do not mean May was a weak freight market,” said Dean Croke, principal industry analyst at DAT, in a statement. “The capacity supply has come down to meet demand, and carriers in the spot market are being compensated for it. Add in the migration of capacity toward contract freight for fuel surcharge certainty, and you have a spot market that’s tighter than load volumes alone would suggest.”
In an interview with LM, Croke observed that the CVSA International Roadcheck week set the scene for where rates are currently at, in terms of year-over-year comparisons.
“I think all of the gains we normally see seasonally around the July 4th holiday season peak has already happened, because rates have stayed relatively stable since [Roadcheck],” he said. “Rates surged up for record week-over-week changes and have stayed there and have not retreated. It really is like we had the July 4th peak early, and the market has not returned. That tells me that demand is still relatively flat, because produce volumes are down around 10% year-to-date. Demand is still not doing anything that we would normally see during produce season. Normally, it is the volume surge that drives rates up to July 4, but it is not happening this year. It is still the capacity story that happened during RoadCheck Week.”
Looking ahead into this summer, Croke said that there is a chance rates could ease, as the market has already seen the volatility, or the “worst of it.” The reason for that, he said, is because if demand stays at its current level, it could lead to a scenario where competing forces of carriers are jettisoned out of the market, due to federal government enforcement efforts. Which are offset by softer demand and things stay relatively flat through the summer. Croke said that is based on the theory that a lot of the exodus of capacity that should not be in the industry has already happened.
Croke attributed current market conditions to what he called a two-tiered economy, with consumer spending numbers not stellar, while industrial manufacturing flatbed freight is very strong. To that end, he cited data from Dr. Jason Miller, Michigan State University Supply Chain professor, which observed that, “absolute payroll levels have fallen to where they were in early 2013. The problem is that we are moving 2018 levels of freight. As such, capacity is off by about 25k (5%) from where it needs to be for the market to be in equilibrium.”
With record-high spot rates attracting headlines, Croke said that in conversations with carriers they are saying that those rates are in tandem with higher inflation, which has been fairly high going back to the pandemic, coupled with spending power in 2026 not as strong as it was in 2018. And in a carrier viability index he created, Croke said that when looking at current carrier profit margins and adjust operating costs for the increase in inflation, it comes in at $1.22 per mile, which is well below where they were at the start of the pandemic, when rates were at $1.53 per mile.
“Even though rates are up, it is the fact that carriers are still not making as much money as they were when rates were lower,” he said. “That is the squeeze that carriers talk about the most. People may say, ‘rates are at record-highs, why are you complaining?’, but the dollar is not going as far as it used to. I think that is a story that needs to be told, with higher costs affecting everybody, and truckers in particular.”
