The freight market in the past year has been marked by exceptionally tight capacity caused by imbalanced carrier networks, which pushed an historically high number of shipments over to the spot market. That placed a great deal of pressure on contract rates, but there are signs that the pressure is releasing.
According to data collected from the Freight Market Intelligence Consortium, a group of leading shippers that rely on data from DAT iQ to inform their transportation operations, overall dry van volume increased by just over 5% in 2020 compared to 2019. The amount of freight moved on the spot market increased by 47%.
That dramatic shift created an extra-hot truckload marketplace, but recent data from the Pulse Signal Report from DAT iQ also shows that the markets have started to cool.
Forward-looking market indicators such as the Spot Premium Ratio (SPR) and New Rate Differential (NRD) dropped in December, according to the report. SPR measures the pressure that spot rates are placing on contract rates, while the NRD compares new rates entering the marketplace with those exiting. Both provide early signs of price changes and whether the markets are tightening or softening.