Freight volume eases, but reefer rates rise, DAT reports

November 18, 2020

Special to Land Line

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Last week we saw signs that demand for freight trucks is starting to slip after a buildup of inventories during September and October.

The overall number of loads posted on DAT MembersEdge fell 8% last week while truck posts jumped more than 11% compared to the previous week. No surprise, then, that van, reefer and flatbed load-to-truck ratios each fell by double digits, although loads of fresh and frozen food are abundant during the lead-up to Thanksgiving.

Let’s take a closer look at the numbers.

National average load-to-truck ratios

National average load-to-truck ratios on DAT MembersEdge were softer last week given the decline in the number of load posts and increase in available trucks.

  • Van load-to-truck ratio – 4.2, down 19% – a full point – compared to the previous week and slightly less than the October average.
  • Reefer load-to-truck ratio – 9.8, down from 11.75.
  • Flatbed load-to-truck ratio – 28.5, down from 34.4.

Van, reefer freight load-to-truck ratios chart

 

National average rates

Fewer loads and more trucks usually means a drop in national average spot rates, but van and reefer pricing actually improved last week compared to the previous week.

  • Van: $2.45 per mile, up 1%.
  • Reefer: $2.67 per mile, up 3.6%.
  • Flatbed: $2.42 per mile, virtually unchanged week over week.

These are national average spot rates for the month through Nov. 15. These averages are based on actual transactions. DAT doesn’t set spot rates – each transaction is individually negotiated between the carrier and the broker or shipper and will vary from load to load and lane to lane.

Trends

Let’s talk turkeys

Looking at DAT MembersEdge top 72 reefer lanes by volume, the average rate was higher on 51 lanes, 17 lanes showed no significant change, and just four lanes were lower. Volume on these lanes was up 7.4% compared to the previous week on the strength of food and beverage freight, which is up 95% year over year.

In the days leading up to Thanksgiving, capacity tends to tighten, especially in Midwest markets, where there is a heavy concentration of turkey farms, feed sources, and processing plants.

Turkey sales (whole birds and cuts) are up with shoppers buying turkey four times more often this year than in 2019. Compared to the national average reefer rate, rates in the five leading turkey-producing states – North Carolina, Minnesota, Arkansas, Missouri, and Indiana – were up 23 cents a mile higher last week.

Van freight moves inland

Outbound volumes from Los Angeles last week were down 13% and from Ontario down 7% week over week. That’s good news because it indicates that the surge in imports that has snarled ports in Southern California and elsewhere on the West Coast is finally moving inland.

The average spot rate was higher on 42 of DAT’s top 100 van lanes by volume last week. Twenty lanes were neutral, and 38 saw rates fall. Notably, the number of inbound loads to Memphis – a major distribution hub for retail goods – was up 8% compared to the previous week.

While the national average van load-to-truck ratio declined last week, the spot market continues to produce opportunities for truckers. Freight volumes are up 67% compared to the same week in 2019 with 5% fewer trucks posting for loads.

Home sales and flatbed freight

A good indicator of demand in the flatbed sector is the Fannie Mae Home Purchase Sentiment Index. While it inched up slightly to 81.7 in October, the third consecutive month of increases, the HPSI is down 7.1 points year over year. The survey-based report indicates that consumers are more optimistic about both home-buying and home-selling conditions but are pessimistic about their personal finances and employment outlook.

Flatbed freight continues to cool with volumes down 7% week over week in DAT’s top 10 flatbed markets. Volumes from Little Rock, the No. 1 market, plummeted by 26% week over week.

Nationally, a 7% decrease in flatbed load posts and a 9% increase in truck posts provides no evidence of upward rate pressure.

The resilience of truckers

The coronavirus outbreak is prompting government officials across the country to impose new restrictions on consumers and businesses.

Once again, Americans will rely on truckers to move the economy, including equipment and other supplies necessary for people to be safe and healthy during this pandemic.

Talk to brokers about your standards for COVID safety conditions at docks and on the road. Freight can’t move without healthy drivers. Take care of yourselves out there.

You can get all of the latest spot rate information at DAT.com/Trendlines. Or take a deeper dive into the market at DAT.com/blog.

Also look for DAT Freight & Analytics across your social feeds on Facebook, Instagram and Twitter, and join the DAT iQ team live on YouTube or LinkedIn Live at 10 a.m. Eastern every Tuesday.

Stay safe, and thank you for your hard work. LL

 

Previously reported on Land Line:

Spot rates enter October on a high, DAT MembersEdge reports

https://www.dat.com/industry-trends/trendlines

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