Rates flatten as truckload demand edges downward, DAT reports

October 21, 2020

Special to Land Line

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Load-to-truck ratios on DAT MembersEdge fell for the second week in a row as demand for trucks cooled. Still, spot rates remain high due to imbalanced networks and tight capacity on specific lanes and markets.

Let’s take a closer look at the numbers.

National average rates, October

  • Van: $2.42 per mile.
  • Reefer: $2.59 per mile.
  • Flatbed: $2.47 per mile.

These are national average spot rates for the month through Oct. 18. Rates will vary from load to load and lane to lane. Let’s look at the trends.

Trendlines

Load-to-truck ratios are softer but still high

National average load-to-truck ratios on DAT MembersEdge were softer last week as the number of load posts on the load board network declined 3% while truck posts slipped 2%. The van ratio was 4.2, unchanged from the previous week and the reefer ratio slipped from 8.7 to 8.3. The flatbed ratio was 37.2, down from 38.9.

Demand for trucks may be flattening, but it continues to be exceptionally strong for the middle of October. These ratios are more than double what they were at this time last year.

Van spot rates slip

Spot market van rates were flat last week, pulling the monthly average down a penny to $2.42 a mile including fuel. The average spot rate was higher on 22 of DAT’s top 100 van lanes by volume compared to the previous week. Twenty-three lanes were neutral and 55 saw rates decline. The number of available loads on these lanes dipped 1.4% week over week.

DAT – Van rate rally levels out

Reefer, flatbed rates in neutral

The national average reefer rate has been in a tight 4-cent band for the last four weeks. Among DAT’s top 72 reefer lanes by volume, 23 were up, 19 down, and 30 unchanged, with the number of loads moved on those lanes up almost 1% compared to the previous week. Rates were better for flatbed freight. Of DAT’s 78 highest-volume flatbed lanes, 30 were up, 17 down, and 31 unchanged on a 0.7% gain in volumes.

Talking turkey

With Thanksgiving coming, reefer volumes are increasing out of poultry markets. The U.S. produces nearly 245 million turkeys a year, the equivalent of 152,800 truckloads by weight. Roughly 63% of turkey production comes from just five states: North Carolina, Minnesota, Indiana, Missouri, and Arkansas.

Hot commodities

In general, several types of freight affected by supply chain imbalances continue to pay well:

  • Van: Rates for freight of all kinds, which includes e-commerce and retail, are up 33 cents a mile over the national average
  • Reefer: Food is running 22 cents a mile higher than the national reefer average, and beverages are up 13 cents a mile
  • Building materials rates are 4 cents a mile over the national flatbed average. Housing activity remains especially strong in the Southeast.

Think local

According to the U.S. Bureau of Labor Statistics, employment at local trucking companies increased 7.4% between its low point in April and July, the last month for which data are available. Long-distance trucking employment hit its low in May and rose just 1.3% from then through July. Compared with July 2019, unadjusted long-distance trucking employment was down 6.4%.

A shortage of qualified drivers may in part explain record levels of spot market activity where asset-based carriers have been unable to meet their contracted commitments on existing lanes. When carriers can’t provide sufficient capacity, shippers have to go deeper into their routing guides or use the spot market. Capacity will eventually catch up to demand but for the moment market equilibrium is way down the road. Keep your eyes on the spot market to take advantage of lanes with scarce trucks and higher-paying opportunities to haul freight.

Negotiate

These rates are averages from last week and this week will be different. Look at the rates and load-to-truck ratios in MembersEdge to understand which way the rates are trending and negotiate the best deal you can get on every haul.

You can get all of the latest spot rate information on our web site at DAT.com/trendlines. Or take a deeper dive with Market Insights at DAT.com/blog. We’ll tell you what you need to know and why it matters.

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. Got questions or comments? Send us an email to AskIQ@dat.com– we’re here to help and we love to hear from you.

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

 

Here is the Oc. 7 DAT rates report.