DAT SOLUTIONS: There's freight to move, but rates lag

Special to Land Line | 5/24/2019

The weather is heating up and so is the availability of freight on DAT MembersEdge – van freight volumes for May are as high as they’ve ever been. But there’s a lot of capacity, too, and it kept spot rates in check last week.

National average rates through May 19

  • Van: $1.80 per mile, 1 cent lower than the April average.
  • Reefer: $2.17 per mile, 2 cents higher than April.
  • Flatbed: $2.29 per mile, 4 cents lower than April.

The price of diesel was unchanged week over week at $3.16 per gallon as a national average.

Van trends

Spot rates went up on 46 of the top 100 van lanes while 44 lanes were down, and 10 were unchanged. The van load-to-truck ratio was 1.6, almost the same compared to last week.

Where rates are rising

Houston, where the average outbound rate gained 4 cents to $1.75 per mile, and Atlanta, up 3 cents to $1.99 per mile. These increases were buoyed by a couple of high-traffic van lanes:

  • Houston to Oklahoma City, up 15 cents to $2.01 per mile on strong demand.
  • Atlanta to Philadelphia, up 11 cents to $2.34 per mile, reflecting a normal seasonal increase.

Where they’re not

Philadelphia was down 6 cents to $1.59 per mile, and Buffalo declined 5 cents to $2.01 per mile, despite double-digit increases in freight volumes. Both markets are known for final-mile freight and are home to regional distribution centers that serve the Northeast.

Reefer trends

Overall reefer load volumes are higher than they were at this time last year, and the number of reefer load posts did increase late in the week. The reefer load-to-truck ratio rose from 2.3 to 2.6 as a national average.

Reefer spot rates in May continue to be at a plus level compared to April and should climb in the next few weeks. For now, only 23 of the top 72 reefer freight lanes had rising rates compared to the previous week. And the Midwest remains in bad shape.

Where rates are rising

While the number of California-outbound loads dropped 7% overall, major reefer markets in the state produced some of the biggest rate gains last week. The average spot reefer rate out of Los Angeles added 4 cents to $2.76 per mile, and several lanes originating in California paid better.

  • Los Angeles to Denver, up 30 cents to $2.90 per mile.
  • Ontario to Chicago, up 16 cents to $2.12 per mile.
  • Fresno to Seattle, up 11 cents to $2.75 per mile.

Where they’re not

We know the story in the Midwest. But Florida was weaker than expected, too. Miami reefer volumes dropped more than 15% and the average outbound spot rate plunged 32 cents to $2.21 per mile. Miami to Atlanta dropped 43 cents to $2.06 per mile.

Roundtrip best bet

Los Angeles-Phoenix

We usually talk about tri-hauls in this space. But we’ve seen some solid round-trip averages lately, including last week’s Los Angeles-Phoenix turn.

  • Average van rate: $1.94 per mile (L.A.-Phoenix, $2.52; Phoenix-L.A., $1.36 per mile).
  • Average reefer rate: $2.72 per mile (L.A.-Phoenix, $2.80 per mile; Phoenix-L.A., $2.64 per mile).

These rates are averages from last week and they may be trending up now. Talk to the load providers and negotiate the best deal you can get on every haul. They may not agree to your terms, but it doesn’t hurt to ask.

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.

 

 

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