Spot market rates for van and refrigerated freight soared to all-time highs in September as the market continues to see historically tight capacity conditions even as the nation hustles to make up for lost time during coronavirus lockdowns and prepare for a looming winter holiday peak season, according to online truckload freight marketplace DAT Freight & Analytics.
The third major trucking mode, flatbed, showed spot rates that were up from August as well, but fell shy of their high-water mark during the middle of 2018, Portland, Oregon-based DAT said.
“We’re seeing strong volumes across equipment types as the economy continues to recover, particularly in areas related to consumer spending. It’s good news for retail, but the industrial and energy sectors are still seeing a dip in volumes,” Ken Adamo, DAT’s chief of analytics, said in a release. “Spot market rates just keep climbing as companies turn to the spot market to help them manage imbalances in their supply chains.”
Looking at the amount of freight moving around the country, volumes for September spot van, reefer, and flatbed were similar to August but load-to-truck ratios increased across all three equipment types as available capacity tightened. That pushed the DAT Truckload Volume Index, a measure of dry van, reefer and flatbed loads moved by truckload carriers, to rise 6.1% from last month and rise 13% compared to September 2019.
Forecasting future conditions, DAT found that the market shows no signs of easing up. In one important sector, grocery store chains are adjusting their lean-inventory strategies and have begun stockpiling for a possible surge of Covid-19 cases in the fall and winter, DAT said. Likewise, major retailers have starting stocking up for the holiday shopping season earlier than usual and are lengthening their sales deals to accommodate shifting demand from consumers. For example, the historical holiday surge is now less monolithic, and features a series of separate spikes, such as Halloween, Thanksgiving, Black Friday, Small Business Saturday, Cyber Monday, Super Saturday, and Christmas
That accelerated inventory build-up in multiple sectors adds another dimension to an already “disjointed” freight market, as manufacturers work to avoid the inventory failures seen in March when coronavirus lockdowns first began, and consumers found shortages of cleaning supplies, toilet paper, and other household goods.