By Mark Montague
Spot truckload freight availability on the DAT North American Freight Index in October increased 24% compared to October 2012.
Now, I know a lot of freight managers and trucking companies are pessimistic about last year’s October numbers. There was, to put it mildly, a lot going on (Hurricane Sandy, the run-up to a big federal election, the first Fiscal Cliff…).
But there’s good reason to be encouraged by October 2013. We set a year-over-year record for spot-freight activity for the fourth consecutive month. Load availability increased 2.6% for vans and 2.3% for refrigerated trailers compared to September. Even with a 3.5% decline for flatbed loads, well in line with seasonal expectations, October was up 1.9% compared to September. (Compared to October 2012, van freight volume rose 4.4%, reefer loads added 22%, and flatbed freight increased 24% in October 2013.)
October’s strong spot market freight volume is consistent with other indicators that point toward economic expansion.
The National Retail Federal expects sales in the months of November and December to increase 3.9% (to $602.1 billion) over 2012’s actual 3.5% holiday season sales growth.
At the same time, American Trucking Associations chief economist Bob Costello predicted a capacity crunch as demand for freight services beings to outstrip a slow-growing supply of trucks and drivers. He added that ATA’s seasonally adjusted truck tonnage index was increasing faster than overall loads, which is a sign of a limited recovery, although Costello noted that the costs of fuel, driver recruitment and retention, and equipment are rising faster than freight rates.
For now, truckers and shippers alike may welcome the relative predictability of spot market results.
National rates measured by DAT held up better post-July 1 than in previous years, due in part to the impact of HOS rule changes, but also because there is a growing realization among 3PLs that small carriers need to offset higher costs with more revenue.
The spot market surged during the first week of November and business remained brisk as I write this in the week prior to Thanksgiving. Rail traffic is another leading economic indicator, and the American Association of Railroads reported solid freight activity during first two weeks of November—the fourth quarter keeps chugging along.
Positive growth in the U.S. housing market and the increased consumer appetite to buy larger-ticket items are reasons for optimism this time of year. Much remains up in the air, including concerns about the debt ceiling and government funding, income growth, and even policies and actions surrounding foreign affairs.
But when I look at the hot spots, freight activity is diverse and being driven by multiple regions. There are good reasons for optimism for a prosperous 2014.
My top wish this season, besides world peace, is for good shippers and trucking companies to forge stronger relationships as the economy starts to ascend. If you’re a carrier, make your New Year’s resolution about rethinking your operating patterns—good freight is out there. If you’re a shipper, position yourself to be found, by the best, regardless of size. There are great small carriers wanting the opportunity.
Happy holidays, everyone, and thank you for reading.
Mark Montague is the industry freight analyst for DAT, which operates the DAT® Network of load boards and RateView analysis tool based on the matching of more than 68 million spot (non-contract) loads and trucks per year. He holds an MBA in Transportation from Indiana University as well as a Bachelor of Science degree in mathematics and has applied his expertise in rates and routing for carriers, 3PLs, and shippers for more than 30 years. He is based in Portland, Ore. For information visit www.dat.com.