While supply chain disruptions continue to create tight truckload freight markets, there are signs that the markets will soften in the weeks and months ahead, according to the Pulse Signal Report from DAT iQ.
Spot rates hit their peak in fall of 2020. If the dry van market continues to follow its historical cyclical behavior of a 9-month lag between spot and contract peaks, then we can expect the active contract rates to peak by the end of Q2 2021 and then start falling.
In January, truckload volume rose 3% year over year for members of the Freight Market Intelligence Consortium – a group of leading shippers that use DAT iQ data to inform their transportation procurement and operations.
But, as with the last several months, the growth of spot was dramatic.
- Dry van: Overall volume increased 3% year over year, with contract decreasing 6% and spot volume increasing 80%.
- Temp-control: Overall volume decreased 6% year over year, with contract decreasing 10% yet spot increased 50%.
- Intermodal: Overall volume increased 10% year over year, with contract increasing 7% and spot 60%.
The cooling trends from the past two months continued, however. There have been seasonal bumps, with severe cold temperatures throughout most of the continental United States – especially Texas – in February. These weather events crippled manufacturer supply chains and increased demand of essential items for retailers.
However, unlike the Polar vortex of 2014-2015 where there were extended weather impacts for months at a time, those disruptions should not impact or overly influence the larger trend of a softer market throughout the remainder of the winter and into spring.