DAT Solutions: With fewer loads available, spot rates fall

The seasonal slowdown has arrived.

Spot rates wilted in the heat last week as load-posting volume on DAT MembersEdge fell 16% and the number of trucks rose 3% compared to the previous week.

Load-to-truck ratios were down for all three equipment types, with flatbeds having the largest decrease.

National average spot rates through July 21
Van: $1.86 per mile, 3 cents lower than the June average.
Reefer: $2.21 per mile, 5 cents lower than June.
Flatbed: $2.28 per mile, 2 cents lower than June

Van trends

Pricing power slumped in most major markets, including Los Angeles ($2.27 per mile, down 4% over the past four weeks) and Atlanta ($2.07 per mile, down 5% over four weeks). Rates were higher on just 20 of the DAT top 100 van lanes, and some of the stronger gains were on lanes where rates are generally low anyway.

Columbus, Ohio, to Atlanta, up 10 cents to $1.98 per mile.
Denver to Stockton, Calif., up 11 cents to $1.24 per mile.

Van volumes and rates are sliding in the Southeast. Houston averaged $1.77 per mile, 3 cents lower than the previous week. With Texas oilfield production down, demand for van freight in outlying markets has slowed.

Reefer trends

Reefer volumes and rates continue to fall, with the load-to-truck ratio dropping from 3.8 to 3.2 last week. Volumes increased slightly in the Midwest but not enough to make up for declines in the rest of the country.

Rates out of Sacramento, Calif., and McAllen, Texas, held up better compared to most markets, and two Midwest lanes stood out.

Green Bay, Wis., to Des Moines, Iowa, up 35 cents to $2.85 per mile.
Grand Rapids, Mich., Cleveland up 15 cents to $3.30 per mile.

Miami cooled after a spike in rates last week. Lanes out the market decreased significantly.

Key takeaways

Low volumes and rates are pushing reefer carriers into the spot van market, causing a drag on van rates.
National average rates are still higher than May, a positive sign for the middle of July.
However, load-posting volume declined sharply at the end of last week; activity could stabilize and rates still may slip further this week.

Tri-haul of the week

Grand Rapids to Philadelphia averaged $2.41 per mile for vans last week but the return trip averaged only $1.39 per mile. The tri-haul function in MembersEdge suggests a third leg to boost your revenue.

One of those triangle routes features Buffalo, N.Y.

Philadelphia to Buffalo averaged $2.27 per mile last week while Buffalo to Grand Rapids paid $2.05 per mile. The average rate per mile on the straight roundtrip was $1.90 per mile but $2.28 per mile for the tri-haul. With 58 additional miles, the tri-haul would increase revenue by $679 for the trip.

Keep in mind that the tri-haul suggested takes you straight west from Buffalo to Grand Rapids, passing through Canada. If you don’t want to go through Canada, you can go south from Buffalo along Lake Erie, but that will add 100 miles to your trip. On the way you’ll pass through Cleveland, so you could even add a fourth leg and pick up a load in Cleveland.

As always, these rates represent averages from last week, and they may be different this week. Talk to the load providers and negotiate the best deal you can get on every haul. They may not agree to your terms, but it doesn’t hurt to ask.

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.