COVID-19 impact on truckling and freight

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Market updates in response to COVID-19

It is our mission at DAT to help customers mitigate uncertainty in their business. We have been observing and reporting on freight trends in near real-time, in order to provide valuable and actionable information to the market. This update supports that goal, helping transportation and logistics professionals to better understand this tumultuous environment.

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If you have any questions about this report, please email us at Enable JavaScript to view protected content.. You may also request the current rates on the top 50 lanes in the U.S. along with predictions through Ratecast, which we are providing for free during this crisis.

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Spot rates rebound to 2019 levels

As we wrap up the month of May and roll into June, it becomes much more evident that the freight markets are soundly in recovery mode. Most of our key indicators are tracking towards 2019 levels and testing where they sat before COVID-19 hit the U.S. If you’re searching for a silver lining in all of this, we would offer up the seasonal timing as good example. Had the country exited the aggressive social distancing measures earlier in the winter or later in the summer, the seasonal boost we are seeing now wouldn’t exist and many carriers may not have been able to weather the one-two punch of COVID-19 and the seasonal slowdown.

Even though we are seeing more optimism in the data, there is still a fair bit of reality to keep the market grounded. Simply clawing back to 2019 levels shouldn’t come as a thunderous victory. Last year was by no means a great year for the freight markets, and a lot of hopes and financial forecasts were predicated on 2020 being a rally year for rates and volumes. At DAT, we are beginning to turn our focus to the longer-term impacts of COVID-19 and what the markets will experience after the seasonal shipping boom and beyond.

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Last Update: May 28, 2020

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Van ratios should keep rising

Dry van LTRs are tracking very closely to 2019 levels. As in prior years, we would expect the value to ‘hockey stick’ upwards over the next few weeks.

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Reefer ratio mirrors van

Reefers are following the same pattern and again face the same uphill climb to keep pace with prior years.

Market Conditions shows more hot spots

Here is our Market Conditions Index (MCI) map for dry vans. We are seeing a lot more warmth across the map as the calendar turns from spring to summer. Key markets to watch are Southern California, Southeast Georgia, and the Upper Midwest.

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Reefer hot spots expand

A similar story is present in the reefer MCI map. One interesting area, besides the normal produce geographies in the south, is the Great Lakes region. There has been a bit of a mini-heatwave over the last week, which is triggering more demand for refrigerated shipping.

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Van rates match 2019 level

Dry van spot rates are continuing their rally and have caught up to 2019. Comparing 2019 and 2017 you will see two very different second halves of the year. This view also makes more apparent the seasonality in the rates.

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Reefer rates see stronger surge

Reefer rates currently sit with 2019 in the rearview mirror and closely aligned with 2017. Similar to dry vans, 2019 and 2017 played out very differently, but we will have to wait a few weeks longer to see if the upward trend continues or if rate growth stagnates, underperforming seasonality after the spring produce boom.

Updated forecasting models for vans

It warrants mentioning that forecasting during this volatile and uncertain period is difficult. Our team is working diligently to update and adjust the models, but the pace at which new information is being made available further complicates the issue. DAT would not typically publish these types of preliminary, internal studies, but we feel that the benefit of sharing our thinking with the industry outweighs the potential negatives. Please treat these statements and exhibits as directional, and consider them as a variable in your own analyses.

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Reefer rate forecasts

Ratecast Prediction: DAT’s core forecasting model estimate that shows flattening and rebound by mid-May.
Pessimistic Scenario: Rates fall more sharply than seasonally expected, primarily due to drop-off in demand.
Blended Scenario: More heavily weighted towards the downside scenario driven by continued decline in demand.
Blended Scenario v2: More heavily weighted towards DAT Ratecast.

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It warrants mentioning that forecasting during this volatile and uncertain period is difficult. Our team is working diligently to update and adjust the models, but the pace at which new information is being made available further complicates the issue. DAT would not typically publish these types of preliminary, internal studies, but we feel that the benefit of sharing our thinking with the industry outweighs the potential negatives. Please treat these statements and exhibits as directional, and consider them as a variable in your own analyses.

Frequently Asked Questions About COVID-19 and DAT Data

Many of you may also have questions specific to your business. You can submit those questions by email to Enable JavaScript to view protected content. and we’ll do our best to help answer them. We’ll also share the most common questions on this page for everyone’s benefit.

What can trucking-related data tell us about the health of the U.S. economy?

The trucking freight market is a leading economic indicator because it reflects supply and demand in near real time. Trucking freight data can signal changes in consumer behavior and sentiment, like the surge in demand for household staples and nonperishable foods caused by the COVID-19 pandemic. You can also see early signs of supply chain disruptions, which will have far-reaching impacts on everyday Americans.
What data sets and analytics tools does DAT have to offer?

DAT’s database of more than $68 billion in freight transactions and 40 years of continuous records represents unmatched breadth and depth in the trucking industry. DAT compiles actual payment records for every point-to-point lane in the U.S. and delivers current, historical, and predictive rate information and analyses. DAT’s more than 450 employees include data scientists, software engineers, and market analysts who mine our extensive database for valuable trends, insights, and intelligence.
What broad trends do we see in the U.S. truckload freight market due to COVID-19?

We’re seeing a lot more volatility in the marketplace, beyond what is predictable based on historical patterns like seasonality and day of the week. For example, we would expect to see a seasonal slowdown in supply around the Chinese New Year , but the slowdown lasted longer due to the COVID-19 outbreak and factory closures in mainland China. That slowdown was followed by sharp increases in spot rates as truckers work hard to keep grocery store shelves stocked with paper goods, food, cleaning supplies, and other household essentials as state and local governments enforce social distancing measures. Along with rising spot rates, other metrics also indicate a tightening of capacity as supply chains work to keep pace with demand.
Does this global disruption have parallels in recent history?

There are several smaller-scale examples of global supply chain disruptions in the 21st century, but the scale of COVID-19 is unprecedented in recent history. Both SARS in 2003 and MERS in 2012 affected manufacturing, but the impact on the American supply chain was diffuse and did not reach the economy at large in the same way we’re experiencing now. Other disruptions like hurricanes or wildfires tend to have local or regional effects on freight market indicators, not national or global impacts.
What patterns do we expect freight markets to follow in the coming months?

The event with the most similar impact on the US freight market in recent years was the ELD mandate. The ELD mandate had a comparable effect on loadboard activity and rates as the industry adapted to the new regulations. Bankruptcies also went up and market indicators bucked seasonal trends. There is a strong likelihood that COVID-19 will follow suit.

Unlike COVID-19, however, the ELD mandate was a singular event. The market adjusted over time and eventually returned to seasonal patterns, but the progression and future impact of this virus is still unclear. With both COVID-19 and the ELD mandate we’ve seen that uncertainty affects the freight industry in similar ways, but the current period of uncertainty is unprecedented in both length and degree. As more states issue stay-at-home orders and more businesses close, it remains to be seen how the market will be affected. Eventually infections will peak, and an adjustment period will commence. When that adjustment is complete, we expect a return to the seasonal trends. We don't yet know how long each phase of that process will last, however.