DAT Solutions: Led by summer produce, California freight volumes heat up

As expected, spot rates and volumes have dipped this month compared to June. Load posts on DAT MembersEdge fell 8% last week and truck posts went down 1.6%, which pushed load-to-truck ratios lower for vans and flatbeds.

But increasing volumes of summer produce loads in California soaked up capacity and sent the reefer load-to-truck ratio up 10%. And July volumes and rates are still running ahead of May.

Let’s dive into the trend lines.

National average spot rates through July 28

• Van: $1.85 per mile, 4 cents lower than the June average.
• Reefer: $2.19 per mile, 7 cents lower than June.

Flatbed: $2.28 per mile, 2 cents lower than June.

Van trends

Van volume slipped 2% last week, and 68 of the top 100 van lanes on MembersEdge had lower rates. However, Los Angeles volume jumped 6% and produce is running strong from the San Francisco and Fresno, Calif., markets, which is good for both van and reefer haulers.

Where rates were rising
Seattle, which includes the ports of Seattle and Tacoma, serves 11 of the top 20 fastest-growing employment markets in U.S. over the past five years. While it’s notorious for low outbound rates, the average spot van rate gained 3 cents to $1.43 per mile, with two lanes up nicely:

• Seattle to Salt Lake City, up 18 cents to $1.84 per mile.

Seattle to Spokane, up 8 cents to $2.98 per mile.

Reefer trends

Reefer volume rose 4% nationwide and rates were higher on 35 of DAT’s top 72 reefer lanes. The San Francisco market, which includes Salinas, Calif., and Watsonville, Calif. – the “world’s salad bowl”– has been a standout for summer produce. Last Friday, the load-to-truck ratio there hit 20.4.

Where rates were rising

Sacramento jumped 12% compared to the previous week and the average outbound rate was up 8 cents to $2.86 per mile.

The number of reefer loads dropped sharply in U.S.-Mexico border markets, with Nogales, Ariz., plunging in both rates (down 15 cents to $2.01 per mile) and volume. McAllen, Texas, lost volume, but the average outbound rate held at $2.13 per mile.

INSERT MAP/CHART (DISREGARD – GG)
<caption>The reefer load-to-truck ratio in the San Francisco market, which includes Salinas and Watsonville, hit 20.4 last week. Darker areas on the map have higher load-to-truck ratios.

Flatbed trends

Spot flatbed rates normally peak in the second quarter, but this year they hit their high in early July. Since then the national average rate has slipped 3.5%. Overcapacity remains an obstacle to pricing power, as trucks are readily available in many parts of the country.

Where rates were rising

Load volume from Jacksonville increased 22% last week and the average outbound rate was up 12 cents to $2.58 per mile. Las Vegas rose 5 cents to $2.80 per mile on a shift from north to south California shipping. Several lanes illustrate how volatile pricing can be:

• Las Vegas to Los Angeles, up 53 cents to $3.45 per mile.
• Las Vegas to Sacramento, down 64 cents to $2.48 per mile.
• Atlanta to Raleigh, N.C., up 44 cents to $2.76 per mile.

Birmingham to Raleigh, down 99 cents to $2.59 per mile.

Remember, these rates represent averages from last week, and this week could be different. Talk to the load providers and negotiate the best deal you can get on every haul, and look at the rates and load-to-truck ratios in MembersEdge to understand which way the rates are trending.

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.