March sees truckload volumes up, but spot rates down

by Inside Logistics Online Staff

Weaker spot market rates and skyrocketing fuel costs in March overshadowed an increase in stronger truckload freight volumes and record-high prices for loads moving under contract.

In DAT Freight & Analytics’s March report, the Truckload Volume Index (TVI) for dry van freight was 305, up 23 percent compared to February; the refrigerated TVI was 206, a 13 percent increase. The flatbed TVI was 247, up 24 percent month over month. The increases reflect more loads moved last month and March having more shipping days compared to February.

Contract rates set records

The price to move van freight under contract increased 19 cents to US$3.28 per mile as a U.S. national average, eclipsing the previous high set in February. The average contract reefer rate was $3.45 a mile, up 20 cents, while the flatbed rate gained 24 cents to $3.69 a mile.

On the spot market, the national average van rate fell to $3.06 per mile, down three cents compared to February, while the spot reefer rate was $3.44 per mile, down nine cents. The flatbed rate was $3.45 per mile, up 26 cents month over month and a new record.

Spot truckload rates, negotiated as one-time transactions between a freight broker and carrier, incorporate a fuel surcharge. Removing the surcharge, the spot van rate fell 21 cents last month to an average of $2.42 a mile and the reefer rate slid 28 cents to $2.74 a mile. The flatbed rate rose five cents to $2.68 a mile.

Supply of trucks outpaced demand

Spot rates remain well above year-ago levels, when the average price of fuel was $3.15 a gallon: in March 2021, the national average van rate was $2.67 per mile, the reefer rate was $2.95 a mile and the flatbed rate was $2.78 a mile. Spot-market loads continued to be abundant. There were 3.7 percent more loads posted to the DAT load board network last month compared to March 2021.

However, signaling that the supply of trucks on the spot market outpaced demand, the national average van load-to-truck ratio fell to 4.6, down from 7.3 in February, meaning there were 4.6 available loads for every van on the DAT network. The reefer load-to-truck ratio was 8.4, down from 13.7. The flatbed ratio increased from 83.9 to 89.8.

Why March was unique

“What made March unique is that shippers paid historically high prices to ensure that more of their loads moved under a longer-term contract, reducing their need for trucks on the spot market and causing rates to soften,” said Ken Adamo, DAT’s chief of analytics.

“At the same time, carriers’ operating costs increased because of higher fuel prices. As a national average, fuel cost $1.07 per gallon more in March compared to February and $1.95 a gallon year over year.”

Small trucking companies and independent operators experienced significantly higher operating costs and lower revenues than they’ve become accustomed to over the past couple of years, said Adamo.

The DAT Truckload Volume Index is produced by DAT iQ and reflects the change in the number of van, refrigerated and flatbed loads moved under contract and the spot market with a pickup date during that month. Index numbers are normalized each month to accommodate any new data sources without distortion. Baseline of 100 equals the number of loads moved in January 2015.

Rates are derived from RateView, DAT’s database of $116 billion in annualized freight transactions, and include over-the-road lanes with lengths of haul of 250 miles or more. Spot rates represent the payments made to carriers by freight brokers, third-party logistics providers and other transportation buyers. Contract rates are paid by the shipper to the carrier.