Before concluding that winter has come for the freight market, we must carefully analyze the data to uncover the truth beneath surface-level observations. The latest November Truckload Volume Index (TVI) report from DAT Freight & Analytics provides a multidimensional perspective, revealing both the complexity of current market conditions and potential opportunities ahead.
TVI Index: The Barometer of Freight Market Economics
The TVI serves as more than just a number—it's a vital economic indicator for the freight industry. By tracking monthly changes in shipment volumes, this index precisely measures market supply-demand dynamics, offering valuable insights for decision-makers. Using January 2015 freight volumes as its baseline (set at 100), any value above 100 indicates shipments exceeding that reference point.
DAT Freight & Analytics employs rigorous standardization methods to ensure data accuracy, adjusting for new sources while eliminating potential biases. The index tracks three primary equipment types—dry vans, reefers, and flatbeds—that collectively represent the freight market's core segments across multiple industries.
Divergent Performance Across Equipment Types
The DAT report highlights significant variations among equipment categories, reflecting distinct challenges and opportunities across market segments.
Dry Van: The November TVI reached 218, marking a 9.5% monthly decrease and 4.4% annual decline. Primarily transporting consumer goods like apparel, electronics, and home furnishings, dry van volumes correlate closely with retail demand. The seasonal lull before peak holiday shopping, combined with macroeconomic pressures like inflation and rising interest rates, likely contributed to this contraction. However, the current index remains substantially above baseline levels.
Reefer: With a November TVI of 170 (down 4.5% monthly and 5.0% annually), refrigerated transport demonstrates relative stability. Serving temperature-sensitive commodities like perishable foods and pharmaceuticals, reefer demand shows less seasonal fluctuation. The smaller decline reflects the inelastic nature of essential goods transportation, while growing consumer preference for premium fresh foods presents new market opportunities.
Flatbed: Recording a November TVI of 218, flatbed shipments fell 11% monthly but surged 13% annually. This equipment type, critical for construction materials and industrial machinery, mirrors infrastructure and manufacturing activity. Winter weather conditions likely drove the monthly decrease, while strong annual growth indicates sustained sector vitality—fueled by government infrastructure investments and industrial modernization initiatives.
Rate Compression Intensifies Market Competition
November saw across-the-board spot rate reductions, signaling heightened competition amid capacity oversupply:
Dry Van: National average spot rates fell to $2.38/mile ($0.05 monthly decrease, $0.55 annual decline)—the steepest drop among equipment types. Pandemic-era capacity expansion created lasting oversupply issues now depressing rates.
Reefer: Averaging $2.80/mile ($0.01 monthly, $0.65 annual decrease), refrigerated rates showed modest erosion due to stable demand fundamentals.
Flatbed: At $2.82/mile ($0.06 monthly, $0.24 annual decline), flatbed pricing reflects complex industrial dynamics influenced by construction cycles and material costs.
Capacity-to-Load Ratios Worsen
November's declining ratios across all equipment types confirmed deepening supply-demand imbalance:
Dry Van: The 2.7 ratio—lowest since May 2020—indicates intense competition, with nearly three trucks chasing each load.
Reefer: The 4.9 ratio (down from October's 5.1) still shows substantial competition in temperature-controlled transport.
Flatbed: At 9.3 (down from 12.5), this eighth consecutive monthly decline suggests relatively softer competition in specialized hauling.
Fuel Surcharges Squeeze Margins
With linehaul rates (excluding fuel surcharges) hitting multiyear lows, carrier profitability faces mounting pressure:
Dry Van: Linehaul rates dropped $0.06 to $1.71/mile
Reefer: Fell $0.02 to $2.07/mile (lowest since June 2020)
Flatbed: Declined $0.07 to $2.02/mile
Contract Rates Show Lagging Effects
Unlike spot market volatility, contract pricing adjustments typically follow delayed patterns:
Dry Van: Broker-contracted rates dipped $0.02 to $3.07/mile, remaining above November 2021 levels
Reefer: Slipped $0.01 to $3.37/mile, still higher year-over-year
Flatbed: Gained $0.03 to $3.65/mile, up $0.31 annually
Expert Analysis: Approaching an Inflection Point?
DAT Chief Analyst Ken Adamo observes meaningful seasonal patterns around Thanksgiving, with notable volume spikes at major intermodal hubs like Los Angeles, Chicago, and Kansas City—potentially reflecting shippers' contingency planning against potential rail disruptions.
Adamo notes contract renewal rates fell 12% (dry van) and 16% (reefer) from October levels, suggesting coming contract rate reductions. He anticipates continued spot and contract rate declines through Q1 2023, with narrowing spreads between the two markets. Historical cycles suggest 8-9% compound annual growth at market bottoms, aligning with announced carrier rate increases and driver wage growth.
The analyst emphasizes that not all holiday inventory has been positioned, with retail freight volumes remaining above non-peak levels despite easier equipment sourcing compared to recent years. Market cycles now appear compressed to 12-18 months rather than traditional 24-month patterns, with spot rates potentially nearing bottom—possibly fluctuating within a $0.10 range before rebounding in Q1-Q2 2023 alongside contract rate stabilization.
Conclusion: Opportunities Amid Challenges
The November TVI report paints a nuanced picture of the freight market—declining rates and excess capacity coexist with gradually improving volumes. Carriers must adopt strategic responses to navigate these conditions:
Operational Efficiency: Optimize routing, equipment utilization, and fuel management to reduce costs.
Diversification: Explore growth segments like cold chain logistics and cross-border transportation.
Customer Relationships: Strengthen shipper partnerships to secure favorable contract terms and consistent freight.
Technology Adoption: Implement smart dispatch systems and IoT solutions to enhance productivity.
As Adamo suggests, the market may be approaching a turning point. While challenges persist, strategic operators can position themselves to thrive when conditions improve—proving that even in winter's depths, spring's potential already takes root.