In just five months, prices have risen by 62 cents per mile in what is known as the largest uninterrupted rate rally of the last five years.

According to  DAT Freight & Analytics, which operates the industry’s largest online marketplace, The DAT Truckload Volume Index, rose 1.1% from last month and is 0.8% higher than August 2019.

They stated that: “Volatility in shipper networks due to shifting consumer purchasing spilled over to the spot market. For instance, commercial food service is way down, but grocery purchases are up,” said Ken Adamo, chief of analytics at DAT. “Asset-based carriers continued to honor their committed volumes but didn’t necessarily provide additional surge capacity. As a result, the number of available loads increased, and prices rose to attract additional capacity.”

In August nationwide, the spot van rate averaged $2.22 per mile, up 19 cents compared to July and 41 cents higher compared to August 2019. The average spot line-haul rate for vans (the overall rate minus fuel surcharges) at $2.02 per mile was the highest monthly national average ever. And for the first time since January 2018 surpassed the national average contract rate.

 

DAT Freight Outlook

  • Weather and wildfires are likely to have an impact on supply chains in the near term, disrupting regular freight networks and creating a higher rate environment due to constraints on capacity. Hurricanes can lead to a tightening of flatbed capacity as machinery and building supplies are needed for recovery efforts.
  • Tight inter-modal capacity and substantial rail surcharges at West Coast ports may force smaller shippers to consider switching to long-haul truckload carriers, especially out of Los Angeles and Long Beach. This would put further strain on spot market van capacity.
  • DAT iQ, the company’s analytics business, now incorporates insights on contract truckload freight from DAT’s Freight Market Intelligence Consortium, acquired in June. FMIC’s Pulse Signal report in August concluded that while July contract freight volumes were flat, shippers increased their load volumes on the spot market from 12-15% on average to approximately 21%. This is a reflection of volatile demand for truckload capacity and of supply chains remaining out of balance.

Source: trucker.com