Spot truck freight volumes show no signs of stalling
Weekly data on the truck spot market suggests that truck freight has seen a steady recovery since volumes bottomed out in March and April. According to an index jointly produced by Truckstop.com and FTR Transportation Intelligence, total spot freight volumes are nearly two-thirds higher than would have been expected by now had the pandemic not occurred. The latest reading for the week ending September 4 is 163.8. The index shows that spot market freight recovered to seasonally adjusted pre-pandemic volumes early in July 2020.
Now that the spot market has clearly recovered from the initial shutdown of the economy, we are shifting our format from daily readings to a weekly review of the market’s response. The COVID-19 Truck Freight Recovery Index (TFRI) is designed to assess freight activity in trucking in response to the COVID-19 pandemic and our recovery from it. Weekly spot load data is indexed to February 2020 and measures changes in volumes compared to a five-year pattern as adjusted by February results. A reading of 100, therefore, would indicate that the market is performing precisely in any given week as we would have expected it to do so had the pandemic not occurred.
The analytics behind the index are similar to those used for the FTR COVID-19 Impact Heatmap, which provides a visual representation of how COVID-19 is affecting spot volumes and rates in each segment nationwide and in individual states. The heatmap is available at www.ftrintel.com/coronavirus.
The TFRI covers not just total truck spot volumes but also component indexes for each of the three principal equipment types – dry van, refrigerated, and flatbed. There are some indications that the index could be hitting a plateau for at least two of the segments, but the dynamics are different.
Spot market metrics are good indicators of truck freight direction and - to a degree - strength, but a recovery in the spot market does not mean that the overall freight market has recovered. Although growing freight demand is a prerequisite for strong spot market volumes, the spot market is quite sensitive to disruption in supply chains, which has been extreme during the pandemic.
TFRI by segment since the pandemic
Dry van and refrigerated were well above 100 for most of March as grocery stores pushed to restock food and staples depleted by Americans’ panic buying in the early stages of the COVID-19 crisis. Dry van’s March surge did not quite hit the heights of the refrigerated segment’s surge, but it was more sustained. Flatbed began falling sharply after the week ending March 13, much earlier than the other segments, as it received no near-term boost in volumes from restocking the way dry van and refrigerated did.
All three segments bottomed out in the middle of March. Flatbed experienced the deepest contraction at nearly 80% below pre-pandemic levels. Dry van and refrigerated both hit bottom between 55% and 60% below pre-pandemic levels. Refrigerated began to recover almost immediately, but it did not move much during May and most of June. Since then, refrigerated has grown more significantly, though with volatility. Dry van and flatbed in early May began what has been a relatively steady recovery, although growth in dry van was sharper and off a higher base.
Today, all segments have exceeded volumes seen prior to the pandemic, and the index has yet to hit a clear peak. Dry van’s surge has been greatest by far at an index reading nearly 120% above the pre-pandemic base. Refrigerated is nearly 60% higher than pre-pandemic levels, but it remains slightly short of the restocking peak during the week ended March 20. Flatbed is more than 40% above pre-pandemic levels. Volume growth in this segment – while relatively slow – has been quite consistent.