Spot rates enter October on a high, DAT MembersEdge reports

October 7, 2020

Special to Land Line

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The national average spot van rate on DAT MembersEdge hit a record high of $2.46 per mile during the week ending Oct. 4, and the overall number of available loads increased 5% compared to the previous week as shippers and brokers paid a premium to get freight out the door in time for the close of the financial quarter on Sept. 30.

A 1.5% dip in the number of available trucks helped send van, reefer, and flatbed load-to-truck ratios higher. Indeed, outbound load counts were down in the country’s top 10 port markets but rates rose in each of those markets as demand outpaced the supply of trucks.

Monthly national average rates, September

In September, the number of spot load posts increased 116% and truck posts declined 6.2% year over year. It’s no surprise that national average rates last month were unseasonably strong.

  • Van: $2.38 per mile.
  • Flatbed: $2.41 per mile.
  • Reefer: $2.57 per mile.

The van rate was up 28.9%, the flatbed rate increased 9.8%, and the reefer rate gained 19.1% compared to September 2019.

Rates continued to climb after Sept. 30. The van rate averaged $2.46 per mile, flatbeds were $2.44 a mile, and reefers were $2.58 a mile during the week ending Oct. 4.

Averages are just that, and you could be seeing drastically different results depending on where you are and what you haul. If you’re moving consumer packaged goods, demand has been high. If you haul mostly industrial materials or manufactured goods, it’s a different story.

Trends

Record results for vans

The average spot rate last week increased on 63 of DAT’s top 100 van lanes by volume compared to the previous week. Twenty-eight lanes were neutral, and nine lanes saw rates decline. The number of available loads on the top 100 lanes increased 2.4% and, at $2.46 per mile, the national average spot van rate was 8 cents higher than the September average. The national average van load-to-truck ratio was 5.5, slightly above the 5.4 average for the month.

Port markets stay busy

Los Angeles was the nation’s busiest market for outbound spot van freight last week, and the average spot rate was $3.37 a mile, up 7 cents week over week. Containerized cargo volumes are moving through the ports of Los Angeles and Long Beach at record levels: total container volume at Los Angeles topped 960,000 TEU (20-foot equivalent units) in August, an all-time high and more than double the volume moved in March. The port said there were no cancellations on its liner services in September.

Retail freight on the move

In the next few days, major retailers like Walmart, Target and Amazon will hold online sales events during a time when e-commerce has surged. We’ve seen a lot of activity in warehousing markets ahead of these sales. Last week, outbound van rates increased from several key markets.
Allentown, Pa., a major warehouse fulfillment market for the Northeast, jumped 19 cents to $2.92 a mile.

  • Columbus, Ohio, averaged $3.19 a mile, up 8 cents.
  • Memphis increased 9 cents to an average of $2.94 a mile.
  • Dallas and Houston recorded modest gains week over week, up a penny to $2.17 and up 3 cents to $2.20 a mile, respectively.

Flatbed rates pick up

The average spot rate last week increased on 41 of DAT’s top 78 flatbed lanes by volume compared to the previous week, 26 lanes were neutral, and 11 lanes fell. The number of available loads on the top 78 lanes increased 2.2%. Regionally, outbound load volumes from the Pacific Northwest are up 17% week over week with 18% of those loads destined for Southern California. Rates from Cleveland, Ohio, are now 10 cents higher over the past two weeks at $2.70 a mile. Cleveland to Roanoke, Va., was up 7.7% while Cleveland to Milwaukee increased 7%.

Will the reefer rally continue?

The reefer rate rally has extended two months longer than usual this year. At $2.57 a mile, the national average spot reefer rate for September is 20% higher compared to September 2019 and has been above the average contract reefer rate since August.

Signs of a plateau

The average spot rate was lower last week on 28 of DAT’s top 72 reefer lanes by volume compared to the previous week; 23 lanes were up and 20 were unchanged. The national average outbound rate from Los Angeles, the highest-volume market for reefer freight last week, slipped 3 cents to $3.66 per mile. Atlanta declined 5 cents to $2.95 a mile. Freight volumes in the Pacific Northwest (Spokane, Wash.; Seattle; Medford, Ore.; Twin Falls, Idaho; and Pendleton, Ore.) cooled off last week and are down 25% month over month. Produce volumes have slowed and reefer capacity has eased in that area, which pushed overall outbound rates from these markets down after peaking two weeks ago.

Tri-haul of the week

South Florida is a black hole for outbound spot freight, but the tri-haul tool in DAT MembersEdge can help you build a better route out of there.

For example, last week Atlanta to Miami averaged $3.10 a mile last week but the trip back paid only $1 per mile—a $2.05 roundtrip average. Using the tri-haul tool, Miami to Tallahassee, Fla., pays likely well below costs at $1.21 but it puts you in position for better-playing loads from Tallahassee to Atlanta, which averaged $2.71. Combined, that pushes the average rate for the trip to $2.38 a mile, about $650 more in revenue on about 85 extra miles, not counting deadhead.

DAT tri-haul of the week chart
These rates are averages from last week and this week could be different. In fact, this week will almost certainly will be different. Nothing is going according to plan these days. So talk to the load providers and negotiate the best deal you can get on every haul, and look at the rates and load-to-truck ratios in MembersEdge to understand which way the rates are trending.

For the latest spot market updates related to COVID-19, visit DAT.com/industry-trends/covid-19 and follow @LoadBoards on Twitter. You can post comments on the DAT Freight Talk blog or on the DAT Facebook page. You can listen to the DAT MembersEdge report every Wednesday on Land Line Now. If you’re a company driver, DAT has a free app called DAT Trucker. It shows where to find fuel, truck stops, weigh stations, Walmart stores, and other important locations while you’re on the road. It’s in Google Play or Apple’s App Store.

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

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