Spot rates, demand for trucks soften after July 4
July 13, 2021
•Special to Land Line
The Independence Day holiday week usually means less freight volume and softer rates, and this year the week of July 4-11 was no exception.
The number of dry van loads posted to the MembersEdge load board was down 17% compared to the previous week, and van equipment posts also declined as truckers took time off. The national average van load-to-truck ratio narrowed from 6.7 to 6.1 and the seven-day average linehaul rate actually rose 4 cents to $2.41 per mile (excluding fuel surcharge), likely as an incentive to keep carriers rolling during a holiday week.
Demand, van rates stay elevated
While van rates tend to slip during the summer, demand for trucks remains high as shippers look to move retail goods for back-to-school shopping and the upcoming holiday season. Contract van rates are on the rise, with new routing-guide rates up 7% in the two weeks ending July 1 compared to the prior two-week period. The average contract van rate is now 37 cents higher than this time last year. The average van spot rate is up 63 cents year over year.
Reefers feel seasonal effects
In the refrigerated freight market, the number of available spot loads fell 17% last week and the national seven-day average linehaul rate dropped a penny to $2.78 per mile (excluding fuel). With 2% fewer equipment posts last week, the national average reefer load-to-truck ratio edged down from 14.2 to 12.7, an expected seasonal trend now that produce shipments have peaked.
Between July 4 and Thanksgiving, weekly truckload volumes of produce typically decline an average of 21%, which translates to carriers hauling 7,300 fewer truckloads per week by the end of November.
Flatbed volume falls again
Flatbed load-post volume dropped for the 11th week in a row. With fewer load and equipment posts last week, the flatbed load-to-truck ratio dropped from 49.7 to 44.1 and the national average linehaul rate slipped 2 cents to $2.73 a mile. Flatbed spot market volumes are definitely cooling with some deflationary pressure on spot rates evident.
Markets to watch
The average spot rate from Atlanta to Chicago, a 716-mile run, has nearly doubled in the last year and is $1.70 a mile higher than the contract rate, which is highly unusual and partly reflective of weak pricing in the opposite direction.
Rates from Los Angeles to Las Vegas held steady at an average of $6.12 a mile last week but the return leg jumped 25 cents to $5.23. That’s an average of $5.40 a mile for the 540-mile round trip.
The average spot rate from Atlanta to Philadelphia surged last week, increasing by 55 cents to an average rate of $4.23 a mile. That’s up a whopping $1.86 per mile since January. Rates in the opposite direction are down an average of 52 cents during the same period.
National average spot rates are derived from DAT RateView, a database of $110 billion in actual market transactions. Get the latest spot pricing information at DAT.com/trendlines or take a deeper dive with Market Insights at DAT.com/blog.
Stay safe, and thank you for your hard work. LL
Check out the July 1, 2021, DAT report for Land Line here.
OOIDA offers a MembersEdge discount on DAT services to its members.