DAT Solutions: Are spot rates stable or stalled?

National average spot rates on DAT MembersEdge held steady last week despite a 3% drop in the number of posted loads and a 2.6% increase in the number of trucks compared to the previous week.

The fact that pricing has stabilized toward the end of August is a sign that spot rates may have hit a seasonal low prior to Labor Day, when demand typically starts to build again.

Fuel prices have slipped for seven consecutive weeks and averaged $2.99 per gallon last week, nearing their low for the year, $2.97 a gallon in late January.

National average spot rates through Aug. 25

• Van: $1.81 per mile, 3 cents lower than the July average.
• Flatbed: $2.20 per mile, 7 cents lower than July.
• Reefer: $2.14 per mile, 5 cents lower than July.

Van trends

Volume on DAT’s 100 top van lanes was up 3% last week but pricing changes were muted: 44 lanes were higher, 47 were lower, and nine were neutral compared to the previous week. No dramatic swings either way. The national average van load-to-truck ratio fell from 2.4 to 2.2.

Where rates were rising

Buffalo saw a big gain in volume last week but the average outbound rate increased just a penny to $2.19 per mile.

Columbus, Ohio, also saw a notable spike in volume that brought increases to the average outbound rate ($2.13 per mile, up 5 cents) and top lanes coming out of the area. The average rate from Columbus to Buffalo, N.Y., was the biggest gain last week while the biggest drop was the return trip from Buffalo to Columbus:

• Buffalo to Columbus: $1.85 per mile, down 10 cents.
• Columbus to Buffalo: $2.82 per mile, up 13 cents.

Reefer trends

Late-summer fruit and vegetable harvests in the Midwest and California have not made up for the lack of activity in markets where production has struggled due to weather. The national average reefer load-to-truck ratio fell from 4.7 to 4.4 and rates were higher on just 24 of DAT’s 72 high-traffic lanes.

Where rates were rising
Demand for trucks was heaviest in California, where the number of available loads was up in Los Angeles (9%), Fresno (8%), and Ontario (6%). Rates in these market were softer compared to the previous week, however.

Of the few lanes that saw higher rates last week, the biggest increases were on relatively low-volume lanes. Grand Rapids saw a surge in lane pricing, with the lane to Cleveland up 69 cents to $4.01 per mile after a 36-cent drop the previous week.

Tri-haul of the week

Columbus-Buffalo-Pittsburgh-Columbus

Let’s take another look at that Columbus-Buffalo lane. Right now the seven-day average for vans running that lane is $2.92 per mile. But the trip from Buffalo back to Columbus pays less: an average of $1.89 per mile. So let’s find a third leg to make the trip more profitable.

The professional version of the MembersEdge load board gives you several tri-haul suggestions, including one through Pittsburgh. The average rate from Buffalo to Pittsburgh for van freight is $3.25 per mile, which sure beats $1.89 per mile. And the rate from Pittsburgh to Columbus pays $3.11 per mile. The straight round trip averages out to $2.41 per mile, but the tri-haul would boost that to $3.07 per mile while adding just 74 miles to your trip. Increasing your revenue by $664 may be worth the extra stop if it works with your schedule.

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.