Spot rates dip as capacity returns
July 17, 2019
•Special to Land Line
Truckload rates on DAT MembersEdge slipped last week as trucks came back into the market after the Fourth of July holiday. Load-posting volume increased 48%, recovering the 45% loss during the previous week when many businesses reduced their shipping schedules. Truck posts increased 21%.
National average spot rates through July 14
- Van: $1.88 per mile, 1 cent lower than the June average.
- Reefer: $2.24 per mile, 1 cent lower than June.
- Flatbed: $2.29 per mile, 1 cent lower than June.
The national average price of diesel increased 1 cent to $3.06 per gallon. It’s worth noting that a dozen states are enacting fuel tax increases this month.
The national average van load-to-truck ratio was up from 2.0 to 2.3 yet spot rates on the 100 busiest van lanes by volume fell 3%, wiping out gains made over the past four weeks. Rates were higher on just 23 of the top 100 lanes.
Where rates were rising
Rates fell in virtually every major market but a few lanes ran counter to the trend:
- Philadelphia to Boston, up 10 cents to $3.57 per mile.
- Chicago to Buffalo, up 10 cents to $2.64 per mile.
- Denver to Albuquerque jumped 13 cents to $2.02 per mile, unusually high for a lane out of Denver.
Rates were lower in Memphis, Atlanta, and Charlotte as truckers escaping the effects of Tropical Storm Barry flooded these markets with capacity.
Unlike the van market, reefer volumes were slow to regain their pre-July 4 levels, as produce-oriented markets in Texas, Arizona and California are starting to taper off. The national average reefer load-to-truck ratio made a modest gain from 3.5 to 3.8 last week but rates were lower on 55 of the top 72 reefer lanes on MembersEdge.
Where rates were rising
Eight reefer markets gave up more than 4% of the prior week’s rate, led by Nogales, Ariz., down 7.4% to $2.21 per mile; Atlanta, down 6.5% to $2.52 per mile; and Los Angeles, down 6.4% to $2.93 per mile. There were mild surprises for reefer rate increases, especially in the East.
Elizabeth, N.J., jumped 7 cents to $1.67 per mile, and a few outbound lanes from the region paid considerably better:
- Elizabeth to Atlanta, up 17 cents to $1.61 per mile.
- Elizabeth to Lakeland, Fla., up 12 cents to $1.70 per mile.
- Philadelphia to Miami, up 26 cents to $1.79 per mile.
- A decrease in spot rates is typical following the Fourth of July holiday.
- Barry’s impact on supply chains was localized to a few markets in the region.
- Agricultural markets lost strength, in line with expectations for mid-July.
- Are we on the cusp of a “freight recession”? Not as long as van load counts remain solid.
Tri-haul of the week
At $2.64 per mile, the van lane from Chicago to Buffalo paid pretty well last week. But the return trip averaged only $1.48 per mile. The 1,086-mile round trip paid an average of $2.06 per mile.
The tri-haul function in MembersEdge can help locate a third leg that may increase your profit if you can work it into your schedule.
For instance, after hauling from Chicago to Buffalo, one option is to route back to Chicago via Pittsburgh.
Buffalo to Pittsburgh averaged $3.17 per mile and Pittsburgh to Chicago was $1.67 per mile last week. This third leg would add 135 loaded miles at $2.37 per mile based on last week’s averages – and bring in $657 more revenue compared to the straight Chicago-Buffalo round trip.
These rates are averages from last week, and this week could be different. 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 things 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.