DAT: Truck contract rates to decline

DAT Freight & Analytics projects truck contract rates to decrease across all markets over the next 12 months.

However, DAT predicts truck spot rates will increase, according to a news release.

“For dry van, we forecast contract rates to continue to fall for the remainder of 2023 but not to pre-pandemic rate levels,” DAT said in the release. “We see the market reverting (spot above contract) sometime in Q1 or Q2 of 2024.”

Likewise, DAT said rates for temperature-controlled loads will follow a similar path as dry van, with spot rates increasing in the second half of the year and contract rates continuing to decline.

For both dry van and temperature-controlled, DAT said the percentage of freight moving via spot rose slightly but stayed within the 17% to 19% range. 

The truckload market has been inverted (spot rates below contract rates) for 17 months, and the gap is still more than 30 cents per mile for both dry van and temperature-controlled, according to DAT.

“It will take a significant event for this gap to close any time soon — either a dramatic growth in demand or further capacity reduction,” DAT said in the analysis. “Neither seems too likely in the short term, so we are waiting on an inflection point.”

DAT believes the soft truckload market will continue for the remainder of 2023.

“There does not appear to be any dramatic surge in demand or mass exodus of capacity in the near-term that would trigger a sudden market shift,” the release said. “But, as we all know, the market will eventually turn, so shippers should get their houses in order, utilize the entire transportation portfolio, maintain strong relationships with core providers, and be prepared for the market shift.”