DAT: Before Hurricane Dorian, strong demand lifts spot rates
September 4, 2019
•Special to Land Line
This week’s news is all about Hurricane Dorian. Our thoughts go out to those affected by the storm, both in the Bahamas and the areas in Dorian’s path this week.
This report recaps rates and freight demand from Aug. 26 through Sept. 1. Most activity related to the Hurricane Dorian happened late in the week, so the storm’s effects on truckload rates were relatively small.
That said, demand for capacity lifted spot freight volumes and rates to monthly highs during the last week of August, which includes the start of Labor Day weekend. The number of van, reefer, and flatbed loads on DAT MembersEdge increased 7% compared to the previous week while available capacity dipped 2.4%.
National average spot rates for August 2019
- Van: $1.81 per mile, 3 cents lower than the July average.
- Flatbed: $2.20 per mile, 7 cents lower than July.
- Reefer: $2.15 per mile, 5 cents lower than July.
Those are averages for August. Spot rates ended the month (and started September) on much better footing. Here are the average rates on Sunday, Sept. 1, the last day of this reporting period:
- Van: $2.11 per mile.
- Flatbed: $2.39 per mile.
- Reefer: $2.23 per mile.
It’s true that national average spot van rates in August were less than they were in July, but they were higher than both April ($1.80 per mile) and May ($1.79 per mile). Fuel is a factor: the average price of on-highway diesel is 12 to 16 cents a gallon less than it was back then (spot rates factor a fuel surcharge calculation into the overall rate).
Van load-to-truck ratios hit 3.0 as a national average on Wednesday, Aug. 28. Van rates tend to rise when the ratio exceeds 2.5, which is where the average settled for the week. Rates on 73 of DAT’s top 100 biggest van lanes by volume were higher, 17 lanes declined, and 10 were neutral compared to the previous week.
Where van rates were rising
While every major market east of the Mississippi River reflected stronger volumes last week, Memphis, Tenn., stood out with a 15% gain in available loads and an average outbound rate of $2.15 per mile, up 4 cents. Memphis to Dallas gained 12 cents to $2.32 per mile.
The national reefer load-to-truck ratio rose from 4.4 to 4.8 last week on the strength of apples and other tree-fruit harvests in the Pacific Northwest and Upper Midwest.
Load-to-truck ratios jumped sharply in the Pendleton market (Yakima, Wash.) and hit 23 on Friday, Aug. 30, while Spokane, Wash., which includes Wenatchee, Wash., topped 34. The numbers look more stark at the ZIP code level: 988XX – Wenatchee – had 544 loads posted and just five trucks, while 989XX – Yakima – had 851 loads posted and 56 available trucks.
Where reefer rates were rising
In Lakeland, Fla., outbound reefer volume was up 14% and the average outbound rate jumped 8 cents to $1.39 per mile. Lakeland to Atlanta increased 18 cents to an average of $1.38 per mile as goods moved out of the area in advance of the storm late in the week.
Spot markets and Hurricane Dorian
Freight follows a common pattern with storms, such as Hurricane Dorian, and other major weather events.
Before the storm
Activity on DAT load boards heats up in the days leading up to the storm as shippers look for trucks to quickly reposition freight in and out of the area.
During the storm
People hunker down and freight movement slows. Emergency responders move in to help with immediate needs and survey the damage.
After the storm
As roads reopen, emergency freight comes in first. Then van and reefer loads come in to resupply stores with groceries and other necessary retail goods, and then flatbed demand picks up later with construction supplies equipment needed for cleanup and rebuilding.
The DAT website includes a number of articles on hurricane relief, how to find FEMA loads, and what to expect if you’re considering taking a load into a relief zone. Go to DAT.com and search for “Emergency Freight.”
If you have logistics resources to offer during recovery efforts, consider the American Logistics Aid Network. ALAN is a volunteer nonprofit organization with a web portal where freight brokers, warehouses, and truck fleets can post available resources and aid organizations can post their needs. For more information, visit ALANAid.org.
Rates are derived from DAT RateView, which provides real-time reports on prevailing spot market and contract rates, as well as historical rate and capacity trends. All reported rates include fuel surcharges.
For the latest spot market load availability and rate information, visit the MyMembersEdge.com load board or tune in to Land Line Now. You can get all of the latest rate information at dat.com per industry-trends per Trendlines, comment on the DAT Freight Talk blog, or join us on Facebook. On Twitter you can tweet your questions to us @LoadBoards and have your questions answered by DAT industry analyst Mark Montague.