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DAT: October spot market rates again break all-time records

Nov. 12, 2020
Truckload Volume Index up 8.7% year-over-year; spot reefer volumes rise 5.1% month-over-month

National average spot truckload rates for dry van and refrigerated freight again soared to new all-time highs in October, according to DAT Freight & Analytics.

The average flatbed rate was up from September as well, but shy of its high-water mark during the capacity crunch of 2018. Spot volumes were up across all equipment types month over month.

The October DAT Truckload Volume Index, a measure of dry van, reefer and flatbed loads moved by truckload carriers, rose 3.8% month-over-month and is 8.7% higher compared to October 2019.

“We expect to see rates continue to rise through Q4 of 2020,” said Ken Adamo, chief of analytics at DAT. “After a historic increase of 95 cents per mile since May 1, when they were at their low point during the pandemic, dry van rates plateaued for most of October with the exception of a slight increase following end-of-month shipping volume.”

Nationally, the October average van load-to-truck ratio (LTR) fell for the first time in six months to 4.3 from a two-year high of 5.5 in September. An LTR of 4.3 means there were 4.3 available loads for every available truck on the DAT load board network. The van load-to-truck ratio was 21.8% lower compared to September but more than double the ratio in October 2019.

Average spot line-haul van rate sets new high

The spot van rate averaged $2.40 per mile nationally in October, up 3 cents compared to September, and 60 cents higher compared to October 2019. At $2.21 per mile, the average spot line-haul rate for vans (the total rate minus fuel surcharges) set a record for the third straight month as the highest monthly national average ever, which exceeded the national monthly average contract rate for the third month in a row.

Spot reefer volumes rose 5.1% month-over-month. The national average reefer load-to-truck ratio was 8.7 in October, more than five times higher than April’s record low of 1.7 loads per truck. The national average spot reefer rate was $2.59 per mile, up 2 cents compared to September and 48 cents higher year over year.

The national flatbed load-to-truck ratio averaged 37.1 in October, lower than its two-year high in September of 40.3. October flatbed volumes were up 1.6% compared to September but 11% lower than October 2019. The national average spot flatbed rate was $2.45 per mile, 4 cents more than the September average and 28 cents higher than October 2019.

DAT Freight Outlook

Concentrated increases (and corresponding decreases) in truckload volumes will trigger a greater use of spot capacity than an equal volume change uniformly spread over the entire network. This concentration of volume changes creates imbalances that lead to increased carrier costs, which in turn help explain why non-asset-based providers are submitting rate increases in bid events roughly twice as high as asset-based carriers.

DAT’s October FMIC Pulse Signal Report, which benchmarks freight transaction data supplied by retailers, manufacturers and other major shippers, concluded that spot market prices will continue to rise (albeit at a decreasing rate) throughout Q4. However, these rates are not expected to maintain these peak levels beyond the New Year, as volumes for retailers and others typically start to decrease in late December and January.

Freight under contract, which represents 80% to 85% of total freight hauled, generally lags the rise (or fall) in spot rates. DAT expects contract rates to rise through Q4 2020; currently, contract rates are almost exactly at year-ago levels.

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