The red-hot truckload spot market is showing signs of cooling off as better weather has unlocked contracted capacity that had been idled during the severe winter, according to a consultancy that tracks spot market trends.
According to DAT, a Portland, Ore-based consulting firm, overall spot market volumes between March 30 and April 5 fell by 3.9 percent from the prior week. Dry van volumes fell 6.3 percent from the week before, while refrigerated, or "reefer," volumes declined 4.6 percent, DAT said yesterday. Flatbed volumes rose 3.2 percent, reflecting the seasonal pickup of construction activity.
Van and reefer rates stayed essentially the same week-over-week, while flatbed rates rose 3.9 percent, DAT said.
DAT's year-over-year figures through the end of March demonstrated the impact of inclement first-quarter weather on spot-market volumes. Shippers unable to move cargo in a timely manner with their contracted carriers were forced into the spot market to procure any capacity they could find. In all, loads rose 63 percent year-over-year. Van, flatbed and reefer loads increased by 92 percent, 99 percent, and 82 percent, respectively, over March 2013 totals, DAT said.
Not surprisingly, spot rates rose by high single-digit or low double-digit levels year-over-year, according to the consultancy. The data is based on space bought by property brokers on behalf of their shipper customers.
In a related development, consultancy FTR said its monthly "Shippers Conditions Index" for February came in at -8.8, indicating an earlier-than-normal tightening of capacity due to winter storms during the month. Any reading below zero reflects an unfavorable environment for shippers.
In a statement, Bloomington, Ind.-based FTR said the climate for shippers should improve if freight growth slows. However, the consultancy advised shippers to procure sufficient capacity to get them through the spring seasonal shipping peak, especially if an unexpected surge in manufacturing activity again puts strains on truck capacity. In what is shaping up to be a significant understatement, FTR said that 2014 "may be a very volatile year requiring increased shipper attention to market conditions."