Spot Freight Rates Weaken as Capacity Increases

The number of available loads on the spot truckload market decreased 2.4% while capacity increased 4.5% during the week of April 25 compared to the previous week, according to DAT Solutions, which operates the DAT network of load boards.

Spot van and flatbed rates continued to soften while the average reefer rate was unchanged compared to the previous week.

Nationally, the average van rate fell for the fourth straight week, dropping 1.1%, to $1.87 per mile as capacity increased 5.7% and the number of available loads fell 7.4%. The average van load-to-truck ratio lost 12%, meaning there were 2.6 available van loads for every truck posted on the DAT network.

The national average rate for flatbeds also slipped, falling 0.5% to $2.19 per mile to its lowest level in four weeks. This most recent decline was in the line-haul rate while the fuel surcharge was unchanged from the previous week. Flatbed load availability edged down 0.7% last week while capacity gained 0.8%, which sent the flatbed load-to-truck ratio down 1.5% to 20.7 loads per truck.

The national average rate for reefers stayed at $2.12 per mile, with both the average line-haul rate and the fuel surcharge unchanged. The number of available reefer loads fell 3.8% and capacity added 4.4%; the load-to-truck ratio fell 0.5% to 5.9 loads per truck.

So when will rates head higher? According to Peggy Dorf, market analyst for DAT, rates typically rise in May and peak in June, especially for reefers, due to high demand generated by fruit and vegetable harvests in the Southeast, Texas, Southwest and parts of California.

“We expect seasonal volume to kick in within a week or two, which should boost rates. Vans will likely get closer to $2.00 a mile, for at least a few weeks,” she said in the DAT blog. “What does not seem likely is a repeat of the record highs of 2014, when the national average rate exceeded $2.00 from the first week in June through year end.”