TransCore's DAT Freight Index, which monitors the spot freight market, continues this year's trend of record same-month freight volumes and a double-digit increase on a year-over-year basis.

July marked the fifth instance of a same-month record in 2012 and the DAT Index outpaced July 2011 levels by 12%, but lagged June 2012 by 20%, says TransCore.

The decline follows a consistent pattern seen since the Index began in 1996.

Truckload freight rates on the spot market also followed historic, seasonal patterns, beginning their decline in mid-July.

Rates for dry vans fell 1.4% compared to June, while refrigerated ("reefer") van rates slid 2.8%. Flatbed rates rose in the first half of July before giving back their gains in the second half, resulting in a flat month compared to June.

Despite the month-over-month variances, rates were up from this time last year: 6.8% for vans, 11% for reefers and 3.4% for flatbeds.

Rates are derived from DAT Truckload Rate Index, and do not include fuel surcharges. Spot market rates are paid by brokers and 3PLs to the carrier.

Looking ahead to September, carriers are likely to find relatively high freight volumes and a favorable ratio of outbound loads emerging in the Midwest, including Illinois, Indiana and Missouri.

When asked why the DAT Freight Index was doing better than the ATA's Tonnage Index, spokesperson Eileen Hart notes that "the spot market is a near real time reflection of what's happening in the truckload market, and therefore tends to be a leading indicator.

"An important dynamic to keep in mind about the spot market that it's driven as much by available capacity, or lack thereof, as much as real growth in freight volumes," Hart explains. "Therefore, as capacity tightens, more freight flows into the spot market from brokers, 3PLs and shippers."

Furthermore, spot freight tends to be heavily dominated by raw and commodity materials and goods.For example, a trailer load of 50-pound bags of chemical ingredients moves on the spot market with live load and unloading and low security. The finished pharmaceuticals travel on contract carriers with high security or on the final mile modes of less-than-truckload and parcel to the consumer. So what the DAT marketplace sees is more oriented to the beginning of the cycle versus finished goods.

Hart notes that a similar leading indicator is the railcar data, as those are lower-commodity goods and raw materials that need to move into position before finished goods can be produced. Railcar data has remained reasonably strong on a year-over-year basis.

The drought is also having an impact on transportation, Hart says. "It is devastating some local markets and replacing those short-haul agricultural movements with longer haul spot market movements (i.e. Washington state apples to the Midwest) which support spot market volumes and pricing. Not all of the country is in drought; spectacular harvests in northern Minnesota and the eastern Dakotas will be shipped further than before because of high prices and demand."

So all in all, the growth of freight in the spot market is being influenced as much by tightening capacity as an absolute increase in freight volumes.