PORTLAND, Ore. — February is typically the slowest month for spot market freight. Last month fulfilled those expectations, but the coronavirus pandemic is likely to disrupt the normal seasonal patterns going forward. Compared to a strong January, truckload rates and volumes declined for dry van, refrigerated (“reefer”) and flatbed equipment, according to the DAT Truckload Volume Index.
Those declines were consistent with normal seasonal trends and not necessarily attributable to the factory closures that followed the coronavirus outbreak in China. Import traffic was already in a scheduled lull for Chinese New Year, but since the gap in traffic extended far longer than anticipated, truckload demand in West Coast port markets is likely to be slow to rebound.
“Ocean and air cargo was affected immediately by the coronavirus-related cutbacks,” said Peggy Dorf, Senior Market Analyst at DAT Solutions. “That will certainly affect truckload freight later, but for now carriers are busy restocking empty store shelves.”
Coronavirus threat will cause price volatility
DAT freight forecasts still show that rates will be higher than last year, beginning in spring or early summer, but prices may not stay consistent with normal seasonality.
“The impact of the coronavirus will add volatility to freight flows, as surges in consumer demand alternate with potential constraints on imports, exports and industrial production,” explained Ken Adamo, Chief of Analytics at DAT. “Our predictive models continue to update to anticipate and account for these atypical trends when forecasting demand, capacity and rates in the coming months.”
February puts freeze on rates
Including fuel surcharges, van rates averaged $1.79 per mile nationally in February, down 8 cents from January and 9 cents from February 2019. At $2.10 per mile, the national average reefer rates lost 14 cents compared to January and fell 11 cents from February 2019. National average flatbed rates dropped 2 cents month over month at $2.15 per mile, an 18-cents decline from February 2019.
Volumes fell 7 percent for both vans and reefers month over month, while flatbed load counts edged down 3 percent. Compared to February 2019, however, volumes increased for all three equipment types: vans gained 10 percent, reefers added 11 percent and flatbed volume rose 4 percent.
About the DAT Truckload Volume Index
The DAT Truckload Volume Index reflects the change in the number of loads with a pickup date during that month; the actual index number is normalized each month to accommodate any new data sources without distortion. Baseline of 100 equals the number of loads moved in January 2015, as recorded in DAT RateView, a database of rates paid on an average of 3 million loads per month. DAT national average spot rates are derived from RateView and include only over-the-road lanes with lengths of haul of 250 miles or more. Spot rates represent the payments made by freight brokers and 3PL to the carriers.