- National average van, refrigerated and flatbed rates have returned to levels before shutdowns began in March, according to a DAT news release on spot data for the week ending June 7. Load postings were up 18.4% from the week before.
- The van spot rate was $1.75 per mile, 15 cents higher than the May average; for flatbed, $2.01 per mile, up from $1.90 in May, and reefer was $2.10 per mile, up from $2.02 in May.
- The higher rates are attracting more truck drivers to the spot market, DAT reported, as available truck postings were up 13% compared to the previous week, "a sign that capacity is shifting to the spot market to take advantage of more abundant freight."
Spot rates appear to have recovered and are still heating up, after a bottoming out in April and a long slow slog back to normality, according to DAT. The load board's "heat map" of heightened spot activity show very tight dry van capacity in southern California, southwestern Arizona, Kansas, east Texas and Georgia.
Flatbed carriers, who move heavy and bulky items often used in manufacturing or construction, saw load volumes increase 2.2% on the top 78 flatbed lanes, DAT reported. And most tellingly, the national average flatbed load-to-truck ratio went above 21 last week, which is better than 2019's peak 20 loads per truck, DAT said. The van ratio went down a bit, from 2.8 to 2.7. The reefer ratio went up from 3.7 to 3.9.
"June couldn’t get here fast enough," wrote DAT analyst Matt Sullivan in his Sunday post, which noted the official arrival of a recession according to the National Bureau of Economic Research (NBER). "Anyone close to transportation during the COVID-19 pandemic can tell you how steeply business dropped off. We've thankfully been rebounding in recent weeks, giving us some momentum as we shift into what's usually a peak month on the truckload spot market."
The numbers are still below 2019. Spot loads are down 8.5% from a year earlier. Yet fuel costs are also down, by 24.3%, DAT said. And the environment seems to be stabilizing, according to one analyst, and will find balance as freight volume and truck postings rise to meet each other.
"The number of trucks parked in April was likely into the six-figure range, and the increased unemployment benefits incentivized drivers not to return to work in the near-term," said Tim Denoyer, ACT Research's vice president and senior analyst, in a Thursday news release. "However, capacity tightness because of too few drivers is much easier to solve than tightness because of too few trucks. With record numbers of qualified drivers looking for work, we expect the current imbalance to be resolved relatively quickly, which will press rates lower as seasonal strength fades in the coming months."
The DAT numbers coincide with predictions from industry leaders that the economy is poised for a sharp reopening. The worst truckload market turmoil is over, at least for Knight-Swift Transportation, CEO David Jackson said June 2 during a UBS Global webinar. Knight-Swift's largest business segment is regular-route, one-way TL, he said, and that segment will benefit from stores reopening.
"We had rather light inventories before COVID-19 began," said Jackson. Pent-up consumer demand, possibly boosted by increased household savings rates, could stimulate Knight-Swift's business, Jackson said. Another factor could be produce season, and warmer temperatures, which will stimulate what Jackson calls "beverage season."
Spot rates make up about 20% of trucking. They are a reflection of the temporal state of the truckload market, and they usually lead contract rates for truckload. As capacity gets eaten up on the spot market, shippers head to for-hire TL carriers such as Knight-Swift.
"The market is going to decide," Jackson told the webinar. "If we have acute tightness, that is, when all of a sudden, we see spot rates pick up, we see contract rates go up. Because now it is about securing capacity consistently to get us through that."