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By Mark Montague, DAT Solutions
There's no better way to gauge seasonal shifts in produce than to look at refrigerated freight patterns on the spot market.
Reefer rates and volumes in markets not named Florida are heating up, especially in California where vegetables and tree fruit are moving now and grapes are coming soon (this year could be a record harvest). During the week ending June 11, the average outbound rate for reefer freight from Fresno, Calif., was $2.21 a mile, up 8 cents compared to the previous week. Los Angeles jumped 11 cents to $2.59 a mile.
In the Midwest, outbound reefer rates from Green Bay, Wisc., averaged $2.49 a mile, up 8 cents, while in the Northeast, Philadelphia averaged $2.19 a mile, up 4 cents.
Meanwhile, nearly all the reefer lanes out of Florida lost traction. Lakeland-to-Charlotte fell 24 cents to $1.66 a mile during the week and was the region's largest decline. Lower demand and rates in the Southeast are another indication that opportunities in Northern and Western markets are beginning to ripen.
Stronger Demand
Higher rates for both van and reefer freight continue a recent pattern of stronger demand on the spot market.
In May, the number of posted van loads was up 21% compared to April. Truck posts rose 2.5%, resulting in an 18% increase in the van load-to-truck ratio for the month to 1.8 loads per truck. Reefer load posts increased 23% while truck posts held steady. That pushed the reefer load-to-truck ratio for the month up 23% to 3.5 loads per truck.
However, freight volume in May was well off of last intermodal rail terminal in North Carolina; the idea is to make the Carolina Connector (CCX) a major transportation hub for the region. The projected completion date is the end of 2019. CSX has
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pledged $150 million to cover costs, and is expecting to receive $100 million from North Carolina’s Strategic Transportation Investment (STI) program. The remaining money is expected to come from other development programs. Then there’s "autonomous logistics," which according to DHL’s "Logistics Trend Radar," is on the rise both on the ground in the form of self-driving vehicles, and in the air—as in unmanned aerial vehicles (UAVs).
year's pace. The van load-to-truck ratio was down 29% and the reefer ratio was 42% lower compared to May 2015.
Higher Fuel Prices
Another factor influencing spot market rates: fuel. National average retail prices for diesel and gasoline continued to increase through June, with further price spikes expected as oil production "disruptions" hit their highest levels in five years this May.
During the week ending June 11, diesel increased 2.4 cents to $2.43 per gallon, though that's 44 cents less per gallon compared to the same week in 2015.
Rates on the spot market incorporate a line-haul portion and a fuel surcharge, so changes in the price of diesel often affect rates on the spot market.
Mark Montague is industry rate analyst for DAT Solutions, which operates the DAT® network of load boards and RateView rate-analysis tool. He has applied his expertise to logistics, rates, and routing for more than 30 years. Mark is based in Portland, Ore. www.dat.com.
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