Although freight rates on the spot market dropped slightly from their historic highs last month, truckload freight volumes and contract prices soared to record levels, new statistics show.
By one measure, the nation’s trucking freight volumes rose 2.4% in March after rising 0.7% in February, according to the American Trucking Associations' seasonally adjusted (SA) For-Hire Truck Tonnage Index. Measured against a threshold of 100 set in 2015, the index equaled 118.8 in March versus 116.1 in February.
“During the first quarter, the index rose 2.4% from the final quarter of 2021 and increased 2.6% from a year earlier. While there might be some recent softness in the spot market, for-hire contract freight tonnage remains sold and is only limited by lack of capacity, both drivers and equipment," ATA Chief Economist Bob Costello said in a release.
By ATA’s count, contract freight was solid in March, posting its largest monthly gain since May 2020 and marking its eighth straight month-to-month improvement, Costello found.
Those trends ran parallel to another measure of freight activity in March, as truckload freight marketplace operator DAT Freight & Analytics said that weaker spot market rates and skyrocketing fuel costs for the month overshadowed an increase in stronger truckload freight volumes and record-high prices for loads moving under contract.
Those factors hit small trucking companies and independent operators hard, as they saw significantly higher operating costs and lower revenues than they’ve become accustomed to over the past couple of years, Ken Adamo, DAT’s chief of analytics, said in a release.
“What made March unique is that shippers paid historically high prices to ensure that more of their loads moved under a longer-term contract, reducing their need for trucks on the spot market and causing rates to soften,” Adamo said. “At the same time, carriers’ operating costs increased because of higher fuel prices. As a national average, fuel cost $1.07 per gallon more in March compared to February and $1.95 a gallon [more] year over year.”
DAT measured those market variables with its Truckload Volume Index (TVI), which for dry van freight was 305, up 23% compared to February; the refrigerated TVI was 206, a 13% increase, and the flatbed TVI was 247, up 24% month over month.
The index also highlighted the difference between the contract market and spot truckload rates, which are negotiated as one-time transactions between a freight broker and carrier.
By cost, the price to move van freight under contract increased 19 cents in March to $3.28 per mile as a national average, eclipsing the previous high set in February. The average contract reefer rate was $3.45 a mile, up 20 cents, while the flatbed rate gained 24 cents to $3.69 a mile.
However, spot market prices tumbled, as the national average van rate fell to $3.06 per mile, down 3 cents compared to February, while the spot reefer rate was $3.44 per mile, down 9 cents. The flatbed rate was $3.45 per mile, up 26 cents month over month and a new record.
Still, spot rates remain well above year-ago levels: in March 2021, the national average van rate was just $2.67 per mile, the reefer rate was $2.95 a mile, and the flatbed rate was $2.78 a mile, DAT said.