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Trucking Trends: Freight Keeps on Trucking into 2018



By Mark Montague, DAT Solutions

This time last year the truckload freight market was settling into a softer, more typical Q1 pattern, freeing up plenty of trucking capacity for shippers after a busy final few months of 2016.

The national average spot line-haul rate for van freight in January 2017 was $1.43 per mile, 25 cents a mile lower than the average contract rate of $1.68. There were 3.3 available van loads for every truck posted on DAT load boards—a bit high for January but not abnormal—and the load-to-truck ratio was trending downward like it almost always does going into February.

At $2.55 a gallon, the average price of fuel had crept up from an 11-year low in early 2016 but was far better than the $3 to $4-a-gallon days of September 2010 to January 2015.

For all intents and purposes, 2017 was off to a lackluster start.

What began as an unremarkable beginning of 2017 for truck transportation ended with record freight rates and extremely tight capacity. In past columns I've talked about the reasons for this run-up, including a strengthening economy and new requirements for truck drivers to use electronic logging devices to record their driving and off-duty hours.

Instead of more words, here are a few graphics that visually tell the story of 2017 compared to previous years:

DAT Freight Index Hits Records

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The DAT North American Freight Index achieved record highs throughout most of 2017 and in June hit its highest point in three years.

In September, demand for truckload capacity experienced the largest year-over-year increase since 2010, when the economy was emerging from a recession. Hurricanes Harvey and Irma contributed to demand, as the storms disrupted supply chains and boosted spot truckload rates to levels not seen since December 2014, when extreme weather closed highways and caused fuel prices to spike.

Van Rates Peak

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The monthly average line-haul rate for vans was $1.43 per mile in January 2017. By the end of the year the average rate increased to $1.81 per mile, roughly equal to the average contract rate for truckload freight.

Line-haul rates do not include a portion for a fuel surcharge, and diesel price rose steadily in 2017. The fuel portion increased 24 cents per mile at the start of the year to 30 cents in December.

Capacity Tightens

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One way to measure supply and demand is by tracking the number of load posts on DAT load boards relative to truck posts. Changes in this load-to-truck ratio often signal impending changes in rates.

Load-to-truck ratios for van, refrigerated, and flatbed freight all achieved record highs in 2017. In fact, the load-to-truck ratio for refrigerated freight was 14.1 in December, the highest monthly average since at least 2010.

Today those crazy-high ratios and rates have started to settle down into a more normal seasonal pattern. But watch out. Things looked pretty normal at this time last year—and then the freight market took off.

Mark Montague is senior industry pricing analyst for DAT Solutions, which operates the DAT® network of load boards and RateView rate-analysis tool. He has applied his expertise to logistics, rates, and routing for more than 30 years. Mark is based in Portland, Ore. For information, visit www.dat.com.