Spot market conditions remain in a better than good place, reports DAT

In the most recent edition of its Trendlines report, DAT said that the number of loads posted on the spot market increased 7.4% for the week ending November 18 compared to the week ending November 11, while the number of trucks posted remained flat.

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Spot market activity, in terms of metrics like loads, capacity, and rates, continues to show very positive momentum, according to DAT Solutions, a subsidiary of Roper Industries.

In the most recent edition of its Trendlines report, DAT said that the number of loads posted on the spot market increased 7.4% for the week ending November 18 compared to the week ending November 11, while the number of trucks posted remained flat.

Load-to-truck ratios for van (6:7) and refrigerated movements rose 15% and 13%, respectively for the same period. The van ratio is slightly below the 7.0 peak at the end of September, while more than doubling its rate on an annual basis.

But perhaps the most telling data point was that some spot rates came in above seasonal norms as national averages, with van rates at $2.06 per mile, which was flat compared to the week ending November 11, flatbed rates art $2.29 per mile were down 1 cent but atypically high for the season, and reefer rates at $2.40 per mile rose 3 cent to a three-year high.

DAT explained that amid strong pre-holiday volumes and concerns about the impact of ELDs on capacity, rates have been buoyed by the rising price of diesel fuel, which was $2.91/gallon as a national average last week.

This most recent weekly performance follows a solid October, which was notable on many fronts, including: spot market loads up 114%; van load-to-truck ratio up 106%; flatbed load-to-truck ratio up 172%; and van, flatbed, and reefer rates up 22%, 21%, and 22%, respectively.

“Things have been going [rapidly] on the spot market since the beginning of September,” said Mark Montague, DAT industry pricing analyst, in an interview. “We saw a bit of an uptick earlier in the year, with the expectation in the industry that capacity was really going to tighten. And following the hurricanes there were some questions as to if things would tail off or perhaps there being a lull in freight. But what we have seen in the last week are record-setting numbers in our RateView product, which counts the physical loads of moves, as opposed to load posting, which saw a high number of loads being posted.”

In a list of top 100 van loads that Montague tracks, he said it reached an all-time high last week. And when looking at reefer loads, he said that while June is typically the highest month, that was not the case, with there being more of an active spot market on the produce side, as opposed to year round commodities like ice cream and frozen dinners, for example, moving in contract mode. And things like fresh fruit and frozen vegetables seeing movements akin to a typical June produce season.

Looking at October, Montague said that things got back to normal after the hurricanes in September, which was impacted by lack of truck availability going into and out of Houston.

“There was more over all freight moving in October, and it also restored the truck supply, which brought the load-to-truck ratio down in October,” he explained.

As for the rest of the year, which the pending ELD mandate taking effect on December 18 looming, Montague said the industry was at around 50% adoption as of late September, adding that while that number is slowly climbing it will not be anywhere near 100% by December 18.

Eileen Hart, DAT vice president of marketing and corporate communications, said that a high percentage of carriers yet to comply with ELD are the smaller ones.

“Rates are high, market conditions are good, and trucking companies are making good money right now,” she noted. “Although carriers are mad about more regulations and don’t want to implement ELD, most will go ahead and do it, and will wait and see how it goes, as they are out there doing well.”

And as long as carriers are profitable, she said DAT does not see people leaving the business. What’s more, she said he largest and most progressive carriers have adopted ELD technology and are through what she called the “transition pain” and know what it’s like to manage capacity on a tighter schedule.

“A lot has been said about the potential productivity loss but also about how over time it improves, and now there are a lot more people out there now that will have to go through that same transition,” she said. 

About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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