The U.S. trucking industry witnessed an unusual phenomenon in September: freight volumes declined across most segments while spot market rates experienced modest increases. This counterintuitive market behavior presents both challenges and opportunities for truckers and freight brokers navigating the complex logistics landscape.
Understanding the DAT Truckload Volume Index
Central to analyzing this market anomaly is the DAT Truckload Volume Index (TVI), which serves as a barometer for industry activity. The index tracks monthly truckload shipments across three primary equipment types—dry vans, refrigerated units, and flatbeds—using January 2015 as its baseline (100). September's TVI revealed divergent performance across equipment types:
- Dry Vans: TVI of 234, marking a 3% monthly and 2% annual decline
- Reefers: TVI of 184, showing a 7% monthly drop but 2% year-over-year growth
- Flatbeds: TVI of 307, achieving 1% monthly and 9% annual increases
The Rate Paradox Explained
Despite volume reductions, national average spot rates edged upward:
- Dry vans: $2.05/mile (+$0.02)
- Reefers: $2.44/mile (+$0.03)
- Flatbeds: $2.50/mile (+$0.01)
Ken Adamo, DAT Chief Analyst, clarifies this apparent contradiction: "The rate increases aren't demand-driven but stem from two structural factors disrupting market equilibrium."
The primary drivers include:
- Regional Freight Imbalances: Geographic disparities in shipment demand created localized capacity shortages
- Capacity Adjustments: Carrier exits reduced available trucks, strengthening remaining operators' pricing power
Market Implications
This unusual market dynamic creates asymmetric impacts across industry participants:
For Carriers: Small fleets (5-10 trucks) benefit most from backhaul rate improvements, though sustained volume declines threaten long-term viability. Approximately 1,200 interstate carriers exited the market in September—matching typical January attrition levels.
For Brokers: Compressed margins emerge as brokers balance higher carrier costs against stagnant shipper rates. Adamo notes, "It's like inflation without wage growth—ultimately unsustainable for many operators."
Peak Season Outlook
Industry analysts express tempered expectations for the traditional October-November peak season. September's port activity slowdown following August's surge suggests muted seasonal demand. Adamo projects: "We'll likely see more carrier failures before the market rebalances."
The backhaul market presents particular anomalies, with previously depressed lanes showing disproportionate rate rebounds. "Only systemic pressure from across-the-board volume growth would create uniform rate increases," Adamo observes. "Current conditions reflect selective lane imbalances rather than broad recovery."
Strategic Considerations
Market participants should monitor several critical indicators:
- Macroeconomic trends affecting manufacturing and retail sectors
- Diesel fuel price volatility
- Equipment utilization metrics
- Regional demand patterns
The September anomaly underscores the trucking industry's complex dynamics, where multiple variables—from geographic imbalances to carrier attrition—can produce counterintuitive market behavior. While select operators may capitalize on short-term rate improvements, the broader market continues facing structural challenges requiring careful navigation.