Freight Rates Climb Despite Falling Shipment Volumes

A peculiar phenomenon occurred in the U.S. freight market in September: freight volumes declined, yet spot rates unexpectedly increased. This rise wasn't driven by demand, but rather by freight imbalances and changes in capacity. Experts predict a disappointing peak season, potentially leading to continued trucking company bankruptcies. Truck drivers are advised to closely monitor the market, optimize operations, expand channels, invest cautiously, and seek professional assistance to navigate these challenges. The unusual rate increase despite lower volume highlights the complexities and potential instability within the current freight landscape.

The American trucking industry continues to navigate turbulent economic waters as recent data reveals a complex picture of declining shipment volumes coupled with unexpected spot rate increases. The September freight market report from DAT Freight and Analytics highlights these contradictory trends that are reshaping transportation economics.

September Market Analysis: Divergent Trends Emerge

The latest Truckload Volume Index (TVI) measurements reveal significant variations across different freight segments:

Shipment Volumes: Sector-Specific Declines

Dry Van TVI: Dropped 3% month-over-month to 234, reflecting weakening consumer demand for retail goods
Reefer TVI: Fell 7% sequentially to 184, indicating seasonal adjustments in perishable shipments
Flatbed TVI: Increased 1% to 307, suggesting continued strength in construction and industrial sectors

The diverging performance across freight types signals structural economic shifts, with consumer spending softening while infrastructure and manufacturing activity show resilience.

Spot Rates Defy Volume Trends

Contrary to volume declines, spot market pricing showed unexpected strength:

Dry van rates rose to $2.05 per mile (+$0.02)
Reefer rates increased to $2.44 per mile (+$0.03)
Flatbed rates reached $2.50 per mile (+$0.01)

DAT Chief Analyst Ken Adamo cautions that "rate increases without corresponding volume growth resemble inflationary pressures without wage growth - an unsustainable situation." Contract rates showed mixed results, with flatbed experiencing the most significant year-over-year decline at 0.8%.

Market Dynamics: Supply-Demand Imbalance

The unusual market conditions stem from several interrelated factors:

Demand-Side Pressures

Consumer spending contraction due to persistent inflation
Seasonal reduction in agricultural shipments
Continued industrial and infrastructure investment

Capacity Constraints

Accelerated carrier exits from the market
Consolidation among larger fleets
Geographic imbalances in equipment availability

September saw approximately 1,200 net carrier authority revocations, matching typical January attrition levels - historically the worst month for carrier exits.

Peak Season Outlook: Tempered Expectations

Traditional fourth-quarter freight patterns appear unlikely to materialize in 2023:

Port volumes declined after August strength
Spot market imbalances may benefit smaller fleets on backhaul lanes
Operating cost pressures continue squeezing margins

Adamo notes that "5-10 truck fleets may see 20% backhaul rate improvements, but macro conditions suggest continued market rebalancing through carrier attrition."

Strategic Considerations for Carriers

Industry participants should consider several operational adjustments:

Prioritize lane density over rate maximization
Monitor equipment utilization metrics closely
Diversify service offerings where feasible
Maintain conservative financial management

The current freight environment presents both challenges and selective opportunities. Market participants who adapt to structural changes while maintaining financial discipline may navigate these conditions most effectively.