|
By Mark Montague, DAT Solutions
Spot truckload rates for van, refrigerated ("reefer"), and flatbed freight set new records in January. Capacity remained tight due to shipper demand and fallout from the electronic logging device (ELD) mandate.
The tight supply had a predictable effect on rates.
The national average spot van rate was $2.26 per mile in January, up 15 cents compared to December and 59 cents higher than January 2017. That's an all-time record. January's spot rate also exceeded the average contract rate by 14 cents, meaning that truckload carriers were paid more for one-time loads from freight brokers than for longer-term contracts negotiated directly with shippers.
At $2.66 per mile, the national average spot reefer rate was 18 cents higher month over month and 71 cents higher compared to January 2017. As with vans, the reefer rate was higher than any monthly average since at least 2010. The spot rate was 31 cents higher than the average contract rate, an extraordinary gap for reefer freight in January.
But national average van and reefer rates have softened in February, and by the third week of the month they had seen six straight weeks of declines.
Will the trend continue? Good question. Here are a few things to consider:
• Declining truckload rates are typical in February. What's less typical this year is the fact that national average van and reefer rates are still higher than they were at any point in 2017. Rates may be falling, but they're falling away from record highs.
• February is usually the slowest month of the year for spot truckload freight volumes. But van freight volumes are also now higher than they were a month ago. There are signs of momentum building
|
in terms of loads to move.
• Two markets worth watching are Chicago and Houston. These are strong cities for van freight like retail goods, and load counts are rising in both places. Higher volumes out of Chicago and Houston are good signs that we could be looking at an early spring for spot van freight overall this year.
• Flatbed freight volumes have been mostly neutral in February after an uptick in January. Again, Houston is a market to watch. Construction activity, which drives flatbed demand, is strong. But flatbed volumes out of Houston, particularly in the energy business, have slumped as the price of oil has gone from above $65 to below $60 per barrel.
So while freight rates are declining on schedule like they almost always do to start of a year, the trends suggests that spot market capacity shortfalls as a result of the ELD mandate have had a stronger impact than slower economic conditions. It's been a long time since rates have been this high—an enticing reason for truckers to keep their capacity in the game.
Mark Montague is senior industry pricing 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. For information, visit www.dat.com.
|
