PORTLAND, Ore. — You know that freight recession they keep saying is right around the corner? Maybe we need to update our GPS.
According to the DAT Truckload Freight Volume Index, which reflects the change in the actual number of spot market loads moved each month, there were more truckload shipments on the spot market in August than any other month in 2019, and monthly volumes for dry van, refrigerated and flatbed freight peaked for each segment.
“The economy has certainly been a hot topic as of late,” said Peggy Dorf, market analyst with DAT Solutions, “but the strong positive trends at the end of August gave us a lot to be optimistic about as we head into the fall shipping season.”
Now, before anyone sounds the “all clear” siren, DAT also pointed out with its monthly report that August is often the top month of the year for spot market volume, with late summer truckload demand boosted by back-to-school season. Plus, supply chains traditionally kick into high gear for Labor Day sales and Halloween inventory.
This year, DAT noted, August numbers got an extra boost as shippers rushed to move freight ahead of Hurricane Dorian, which disrupted the Southeast coast in early September.
The report also stated that even though stronger volumes have yet to push truckload prices higher, there were signs late in the month that rates were turning a corner.
According to DAT, van rates averaged $1.80 per mile in August, down 4 cents from the July average. The August average was 34 cents below the rates of August 2018. Much of the year-over-year decline can be attributed to more available truckload capacity, as dry van volume last month was 7.9 percent higher than a year ago. Compared to July, van volume rose 2.1 percent.
Produce harvests in the Upper Midwest provided a lift for reefer markets. Reefer volume in August increased 2% from July and rose 6% compared to August 2018. Reefer rates dropped 4 cents in August from July, however, and as with vans, the national average of $2.15 per mile was also 34 cents lower than last year’s rate.
The increase in flatbed volume was modest, at only 0.5% month over month. Flatbed shipments were up 7.7% compared to August 2018, but declining oil prices led to cutbacks in drilling activity. That contributed to lower flatbed rates, and the national average slipped to its lowest point of the year at $2.19 per mile. That’s an 8-cent drop from July and 45 cents lower than the August 2018 average.
“Spot market rates seem to have found the bottom in August, and are poised for a rebound,” Dorf said. “Even if there’s disagreement over the economic outlook, one thing is certain — truckload capacity is still in high demand.”