Reaching the highest-ever volume for the month of January, the DAT North American Freight Index increased 42% last month compared to January 2012.
Freight volume was unusually robust for the season, exceeding December levels by 24%. This is the first time the Freight Index has shown an increase in freight availability from December to January. Over the past 10 years, there has been a 13% average decline in freight levels between those two months.
The DAT North American Freight Index is a measure of spot market freight availability in the U.S. and Canada.
Seemingly Contradictory Market Activity
Several things contributed to the seemingly contradictory market activity reflected in the DAT North American Freight Index in January — that is, a big increase in the volume of freight without a corresponding rise in rates.
"Also, according to industry reports, the 'contract marketplace' — i.e., freight shippers directly contracting loads out to carriers — shrank by 2.5% in January. This would have forced capacity into the spot market, which, while robust, is smaller than the contract marketplace. The net-net of all this is that loads as well as trucks (capacity) greatly increased on the spot market in January."
Mismatched Demand and Capacity
Despite strong freight volumes, truckload capacity remained relatively loose in the spot market, so rates followed a somewhat typical seasonal pattern of a January decline that was most significant for vans and flatbeds. Van rates dropped 2.4% and flatbed rates slipped 2%, not including fuel surcharges. Reefer rates remained stable in January compared to December. On a year-over-year basis, van rates declined 2.4% and flatbeds lost 5.7%, while reefer rates rose 8.6%.
Meanwhile, Schrader says, February data is shaping up as you might expect in a dynamic market. DAT is seeing increased demand regarding spot freight plus tightened capacity, contributing to a rise in the line-haul rate.
Looking ahead to March, DAT believes the best combination of load volume and a favorable ratio of outbound loads should be found in Ohio, Illinois and Indiana in the Midwest, as well as in the Southeastern states of Georgia, North Carolina and Alabama.