Freight volumes and rates took a hit in April thanks to the COVID-19 pandemic., according to transportation analysis firm DAT.
Transportation analysis company DAT of Portland, OR reports in a news release its DAT Truckload Volume Index, a measure of dry van, refrigerated (reefer) and flatbed loads moved by truckload carriers, fell 19 percent from March and 8 percent from April 2019.
“With so many businesses closed or operating at low capacity, truckload shipments have plunged, which put spot rates in dangerously low territory for owner-operators and small carriers,” Ken Adamo, chief of analytics at DAT, said in a news release. “Some carriers parked their trucks to wait for better business conditions, but there’s still lots of available capacity as a result of the low volumes, which has kept rates down.”
The April load-to-truck ratio for vans was 1.0 nationally, which DAT said was the lowest level since February 2016. In fact, for three weeks in April, the ratio was less than 1.0, meaning there were more trucks than freight posted on the DAT network, according to the release.
For the week of April 7, the USDA reported that fruit and vegetable truckload volumes were 110,327 (10,000-pound) units, down from about 147,016 units for the week of April 2 a year ago.
Spot reefer volumes were weak but ended April on an upward trend as fruit and vegetable harvests started to get underway. DAT said the reefer load-to-truck ratio was 1.7 in April compared to 5.6 loads per truck in March, matching at all-time low in April 2017.
The national average reefer spot rate was $1.92 per mile, down 25 cents compared to March and 23 cents lower year over year. according to DAT.
U.S. average diesel costs were much lower, at $2.39 per gallon in early May compared with $3.17 per gallon a year ago.
Truck Demand Should Improve
With the market bottoming out in April, the outlook should improve for truck demand.
Ratecast and Market Conditions Index—predictive metrics from DAT anticipate higher prices and volumes as states relax their stay-at-home orders, produce season begins and port markets like Los Angeles, Houston, Savannah, Ga. and Elizabeth, N.J., see more traffic.
“Carriers will not be able to sustain operations very long at current levels,” Adamo said in the release. “Spring produce shipping should offer some relief and put some needed upward pressure on prices in May.”