The Port of Los Angeles moved more overall shipping containers than it has in eight years – pointing to a possible uptick in the economy.
One longtime transportation industry analyst says the increased freight has served another end for the trucking segment: higher freight rates.
Mark Montague, manager, industry pricing for DAT and covers the spot market, recently wrote about the high level of performance transportation stock has seen in 2014.
Much of the difference, Montague wrote, is in the higher rates trucking companies have been able to charge during a relative over load of freight capacity. Many imports were moved into the West Coast prior to traditional pre-holiday retail shipping season to avoid possible labor issues at the Ports of Los Angeles and Long Beach, Montague wrote.
“Freight is still arriving, and the highest-volume U.S. ports, in Los Angeles and Long Beach are busier than ever,” Montague wrote. “This week’s activity on DAT Load Boards included more than 2,000 available van loads and 500 to 600 outbound trucks posted per day from the Los Angeles market, home to both ports. Spot market rates rose last week on the lanes from L.A. to the regional freight hubs of Stockton, Phoenix, Denver, Dallas and Atlanta.”
Shippers expect to pay higher rates for truckloads into the holidays “and well into 2015,” Montague wrote.
Trucks hauling loads out of L.A. are seeing atypically high rates, including loads headed to Phoenix, Montague said. The higher prices have been driven by a load-to truck ratio of 4.3 per truck, which has prompted shippers to pay smaller and middle-sized motor carriers more money per mile for individual loads from freight brokers than rates received under contract directly from shippers to large trucking companies.
“Rates on that lane are approaching the all-time peak average of $2.57,” Montague wrote.
One publication recently reported that a survey of shippers said 52 percent of shippers planned to pay peak surcharges to move truckload freight during the year’s fourth quarter, and planned to use more freight brokers to place those loads.
According to a Port of Los Angeles news release, overall shipping volumes for September 2014 were up 9 percent above September 2013 numbers. September’s total cargo numbers were 775,133 twenty-foot equivalent units, or TEUs. That figure was the busiest single month the port has posted since August 2006.
The port pointed to the coming holiday retail season and larger ships coming into the port for the increase.
“The increased volume reflects peak season volumes and larger vessels calling at the Port of Los Angeles,” the news release says.
Imports of containers were up 11 percent from September 2013 to September 2014, going from 370,286 TEUs to 411,507 during that span. Exports increased only from 150,380 TEUs to 150,679.
For the first nine months of 2014, overall cargo volumes have increased 7.8 percent above 2013 statistics, going from 5,847,167 TEUs to 6,302,470 TEUs.
Los Angeles' neighboring port also saw increased numbers in September.
According to a news release from the Port of Long Beach, 629,771 TEUs moved through Long Beach Harbor in September - up 7.3 percent from September 2013 volume.
A large number of holiday season imports made the month the Port of Long Beach's third busiest import cargo month ever, the news release said.
The twin ports at Los Angeles and Long Beach combine to import 40 percent of retail goods shipped to U.S. ports.
“This is shaping up to be a busy season,” Montague wrote in his blog entry. “And hopefully a lucrative one for freight transportation and logistics professionals.”
Copyright © OOIDA