DAT: After a robust May, truckload volumes slipped in June

Rhea-AI Summary

DAT Freight & Analytics reported a decline in truckload volumes in June after a strong May. The Truckload Volume Index (TVI) decreased for van (down 9%), reefer (down 11%), and flatbed loads (down 7%) month over month. Year over year, the van and flatbed TVI dropped by 3% and 5%, respectively, while the reefer TVI rose by 7%. Despite the decline in volumes, spot truckload rates increased for three consecutive months, with van rates rising to $2.07 per mile, reefer rates to $2.45, and flatbed rates to $2.53. The average linehaul rates also saw an uptick. The load-to-truck ratios for van and reefer loads increased for the fourth straight month, indicating higher demand and fewer trucks in the marketplace.

Positive

• None.

Negative

• Truckload Volume Index (TVI) for van loads decreased by 9%.
• Truckload Volume Index (TVI) for reefer loads decreased by 11%.
• Truckload Volume Index (TVI) for flatbed loads decreased by 7%.
• Year-over-year decline in van TVI by 3%.
• Year-over-year decline in flatbed TVI by 5%.

Insights

Market Research Analyst

The latest insights from DAT Freight & Analytics reveal an intriguing situation in the truckload market. While truckload volumes declined in June across van, reefer and flatbed categories, spot rates conversely rose for all three equipment types. This indicates increased pricing power despite reduced volume, likely due to constrained capacity or other supply chain bottlenecks.

Higher spot rates, especially with the third consecutive month of increases, suggest that demand, while volatile, remains robust enough to support elevated pricing. The increase in load-to-truck ratios further supports this, indicating a tighter market where fewer trucks are available relative to loads. This condition typically leads to higher spot rates. Van and reefer ratios have been climbing, reflecting a combination of higher demand and fewer available trucks, making freight transportation more competitive.

From an investor perspective, these dynamics imply that freight operators might maintain or improve profitability in the short-term due to higher spot and contract rates. However, the anticipated easing of freight activity during the summer may lead to rate stabilization or even reductions, impacting revenue growth. Investors should monitor these trends closely as they could signal upcoming shifts in market conditions.

Financial Analyst

The data presents a nuanced picture of the freight market. Despite the drop in truckload volumes, the increase in spot and contract rates across most categories is noteworthy. For van freight, a spot rate increase to $2.07 per mile and a contract rate increase to $2.44 per mile—albeit modest—still represent positive revenue signals for freight companies. Similarly, the reefer rates rose to $2.45 and $2.81 per mile for spot and contract rates, respectively.

These increments might seem small, but in an industry with tight margins, such changes can significantly impact profitability. A rise in linehaul rates, which exclude fuel surcharges, further illustrates the pricing power carriers currently hold. Investors should weigh these factors against the backdrop of potential easing in freight activity later in the summer. A short-term gain in spot rates might not be sustainable and future projections should account for seasonal variations and economic conditions impacting freight demand.

Key financial takeaways should focus on the sustainability of these rate increases and how they align with broader economic indicators. Monitoring these metrics will be important for evaluating the financial health and future performance of freight operators.

BEAVERTON, Ore.--(BUSINESS WIRE)-- Spot truckload rates rose in June despite declines in the number of loads moved, said DAT Freight & Analytics, which operates the DAT One freight marketplace and DAT iQ data analytics service.

The DAT Truckload Volume Index (TVI), an indicator of loads moved during a given month, retreated from all-time highs for van and refrigerated (“reefer”) loads in May:

• Van TVI: 266, down 9% month over month
• Reefer TVI: 199, down 11%
• Flatbed TVI: 279, down 7%

Year over year, the van and flatbed TVI dipped 3% and 5%, respectively. The reefer TVI was up 7% compared to June 2023.

“The month ended strong for dry van freight, with nearly 25% more volume moving during the final week of June compared to last year,” said Ken Adamo, DAT Chief of Analytics. “While demand for trucking services entered July on a high note, we expect freight activity to ease during the summer. This remains a challenging market for freight carriers and brokers.”

Spot rates rose for all three equipment types

National average spot truckload rates increased for the third consecutive month in June:

• Spot van: $2.07 per mile, up 6 cents
• Spot reefer: $2.45 a mile, up 4 cents
• Spot flatbed: $2.53 a mile, up 1 cent

The average van linehaul rate was $1.64 a mile, up 6 cents compared to May; the reefer rate gained 5 cents to $1.99; and the flatbed rate increased 1 cent to $2.02. Linehaul rates subtract an amount equal to an average fuel surcharge.

National average rates for contracted van and reefer freight ticked higher:

• Contract van rate: $2.44 per mile, up 1 cent
• Contract reefer rate: $2.81 a mile, up 2 cents
• Contract flatbed rate: $3.14 a mile, down 2 cents

Van and reefer load-to-truck ratios increased

National average van and reefer load-to-truck ratios increased for the fourth straight month in June, reflecting a combination of higher demand and fewer trucks in the marketplace:

• Van ratio: 4.7, up from 4.4 in May, meaning there were 4.7 loads for every van truck on the DAT One marketplace
• Reefer ratio: 7.0, up from 6.3
• Flatbed ratio: 14.6, down from 18.0

Ratios were higher year over year. In June 2023, the average van ratio was 3.5, the reefer ratio was 5.5, and the flatbed ratio was 13.3.

Load-to-truck ratios reflect truckload supply and demand on the DAT One marketplace and indicate the pricing environment for spot truckload freight.

About the DAT Truckload Volume Index

The DAT Truckload Volume Index reflects the change in the number of loads with a pickup date during that month. A baseline of 100 equals the number of loads moved in January 2015, as recorded in DAT RateView, a truckload pricing database and analysis tool with rates paid on an average of 3 million loads per month.

DAT benchmark spot rates are derived from invoice data for hauls of 250 miles or more with a pickup date during the month reported. Linehaul rates subtract an amount equal to an average fuel surcharge.

About DAT Freight & Analytics

DAT Freight & Analytics operates both the largest truckload freight marketplace and truckload freight data analytics service in North America. Shippers, transportation brokers, carriers, news organizations, and industry analysts rely on DAT for market trends and data insights based on more than 400 million annual freight matches, and a database of $150 billion in annual freight market transactions.

Founded in 1978, DAT is a business unit of Roper Technologies (Nasdaq: ROP), a constituent of the Nasdaq 100, S&P 500, and Fortune 1000. DAT is headquartered in Beaverton, Oregon.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240717386462/en/

Annabel Reeves

PR@dat.com / annabel.reeves@dat.com; 503-501-0143

Source: DAT Freight & Analytics

FAQ

What was the change in the Truckload Volume Index (TVI) for van loads in June?

The Truckload Volume Index (TVI) for van loads decreased by 9% in June.

How did the reefer Truckload Volume Index (TVI) change year over year?

The reefer Truckload Volume Index (TVI) increased by 7% year over year.

What was the spot truckload rate for van equipment in June?

The spot truckload rate for van equipment was $2.07 per mile in June.

What trend was observed for load-to-truck ratios for van and reefer loads in June?

The load-to-truck ratios for van and reefer loads increased for the fourth straight month in June.