The US trucking market displayed a puzzling contradiction in September 2023: while freight demand continued to weaken, shipping rates unexpectedly climbed. This "declining volume, rising prices" phenomenon has drawn significant attention from market participants and carries profound implications for future trends. The Truckload Volume Index report from DAT Freight and Analytics provides crucial data and analysis to understand this complex market situation.
The DAT Truckload Volume Index: A Market Barometer
The DAT Truckload Volume Index (TVI) serves as a key indicator of activity in the US trucking market. Compiled and published by DAT Freight and Analytics, this index tracks monthly changes in truckload volumes to reflect market supply-demand dynamics and broader economic conditions.
Index Composition and Methodology
The DAT TVI uses January 2015 data as its baseline (index = 100), with standardized processing to ensure accuracy and comparability. The index covers three primary equipment types:
- Dry Van: Enclosed trailers for general freight
- Reefer: Refrigerated trailers for temperature-sensitive goods
- Flatbed: Open trailers for oversized or irregular cargo
Key Data Sources: The index draws from DAT One, North America's largest freight transaction platform, which aggregates vast amounts of shipping data.
Interpretation: Values above 100 indicate volumes exceeding the January 2015 baseline, while values below 100 show reduced activity. Trend analysis reveals demand fluctuations.
September 2023 Market Analysis
The US trucking market exhibited several notable characteristics in September:
1. Overall Volume Decline
- Dry Van TVI: 234 (down 3% month-over-month, down 2% year-over-year)
- Reefer TVI: 184 (down 7% MoM, up 2% YoY)
- Flatbed TVI: 307 (up 1% MoM, up 9% YoY)
2. Spot Rate Increases
- Dry Van: $2.05/mile (+$0.02 MoM)
- Reefer: $2.44/mile (+$0.03 MoM)
- Flatbed: $2.50/mile (+$0.01 MoM)
3. Contract Rate Fluctuations
- Dry Van: $2.42/mile (flat MoM, down $0.50 YoY)
- Reefer: $2.74/mile (+$0.02 MoM, flat YoY)
- Flatbed: $3.06/mile (-$0.02 MoM, down $0.80 YoY)
Expert Analysis: The Demand-Rate Paradox
DAT Chief Analyst Ken Adamo explains that September's rate increases weren't demand-driven but resulted from freight imbalances and shifting capacity availability. This unusual "volume down, rates up" pattern raises concerns, particularly with the traditional peak season (October-November) approaching.
"This situation resembles inflation without wage growth," Adamo cautioned. "When rates rise without corresponding volume increases, it signals structural market issues that could negatively impact participants."
Key Factors Driving the Paradox
- Freight Imbalance: Mismatched inbound/outbound flows create regional capacity shortages
- Capacity Fluctuations: Equipment exits due to fuel costs and driver shortages tighten supply
- Backhaul Focus: Rate increases concentrate on traditionally low-rate return trips
Market Impact and Outlook
Brokerage Sector Challenges
Freight brokers face compressed margins as rising carrier costs collide with shrinking shipment volumes. Increased competition for limited freight exacerbates pressure in an already low-margin environment.
Carrier Market Dynamics
While some small carriers (5-10 truck fleets) may benefit from backhaul rate improvements (up to 20% increases), the broader market continues to contract. September saw approximately 1,200 interstate carriers exit - matching January's peak departure rate.
Peak Season Projections
With port volumes declining after August's surge, Adamo anticipates a weak peak season. Only select carriers positioned for backhaul advantages may see meaningful benefits.
Strategic Recommendations
For Carriers
- Prioritize cost containment and operational efficiency
- Diversify revenue streams through value-added services
- Monitor backhaul opportunities for margin improvement
For Brokers
- Enhance market analytics for strategic decision-making
- Optimize operational workflows to reduce overhead
- Strengthen negotiation capabilities with shippers and carriers
For Shippers
- Explore multimodal transportation solutions
- Strengthen carrier partnerships for capacity assurance
- Optimize supply chains to mitigate rate volatility
September's market data serves as a cautionary indicator for all participants. In this complex, dynamic environment, success will require vigilant market monitoring, disciplined cost management, and strategic flexibility to navigate ongoing uncertainties.