DAT Solutions: Shippers feel little urgency as van freight volume falls 3%

August 14, 2019

Special to Land Line

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With new tariffs on Chinese imports starting on Sept. 1, there was uncertainty over how truckload markets would react heading into August. Indeed, spot freight volume on DAT MembersEdge actually increased 1.2% last week, but a decline in van load availability indicates that there doesn’t seem to be much urgency on the part of shippers to move goods ahead of the deadline for the taxes to take effect.

The number of available trucks increased 3.7% compared to the previous week, and spot rates in August remain below July averages. The price of diesel fuel, a factor in spot pricing, was unchanged last week at $3.03 per gallon.

National average spot rates through Aug.11

  • Van: $1.81 per mile, 3 cents lower than the July average and up 2 cents from last week.
  • Flatbed: $2.28 per mile, 5 cents lower than July.
  • Reefer: $2.14 per mile, 5 cents lower than July.

Van trends: Sliding volumes in the Southeast

Van volume slipped 3% last week, and 57 of DAT’s top 100 van lanes by volume had lower rates. The national average van load-to-truck ratio dropped from 2.2 to 2.1 last week. That’s nearly a full point lower than the August 2018 average.

Among the few positive major markets was Buffalo, N.Y., where van freight volume increased 3% compared to the previous week and the average outbound rate rose 7 cents to $2.08 per mile. Otherwise, spot van volumes have been sliding over the past four weeks, especially in large Southeastern freight hubs:

  • Atlanta, down 8% over four weeks.
  • Charlotte, down 5%.
  • Memphis, down 7%.
  • Houston, down 5%

Reefer trends: Demand shifts north

Demand for reefer trucks trailed off in California and Texas last week, and the majority of high-traffic reefer lanes paid lower. There were signs of activity shifting northward, as higher volumes from Denver (up 34%) and Grand Rapids (up 71%) helped elevate the national average reefer load-to-truck ratio from 4.2 to 4.3.

While apple harvests won’t kick into gear until the end of August, demand for reefers to haul other crops sent rates higher on key Midwest lanes:

  • Grand Rapids, Mich., to Cleveland, Ohio, surged 62 cents to $3.71 per mile.
  • Grand Rapids to Atlanta added 31 cents to $2.59 per mile.
  • Chicago to Atlanta rose 20 cents to $2.77 per mile.
  • Chicago to Philadelphia was up 16 cents to $3.03 per mile.
  • Chicago to Denver increased 13 cents to $2.40 per mile.

Fewer reefer loads out of California meant more truckload capacity was available elsewhere. Reefer load volume out of Los Angeles fell 10% last week, Sacramento was down 5%, and Ontario declined 3%.

Tri-haul of the week: Columbus-Philadelphia-Pittsburgh

We’re going to head from Columbus, Ohio, to Philadelphia, where the average spot van rate was $2.52 per mile last week. But the return trip averaged just $1.43 per mile, so instead of going straight back to Columbus, let’s check the Pro version of MembersEdge for tri-haul routing suggestions.

One option: adding a stop in Pittsburgh.

The average from Philadelphia to Pittsburgh for van freight last week was $2.49 per mile. And the rate from Pittsburgh to Columbus paid $3.11 per mile. While the straight round trip averaged $2.09 per mile, the tri-haul would boost that average to $2.74 per mile. For an extra 24 miles, not counting deadhead, the tri-haul would increase your revenue by $672 if it works with your schedule.

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 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.

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