Freight rates on one leading spot market have declined over the past week, but they remain stronger than usual for this time a year, especially in two sectors.
Spot market freight rates are remaining stronger than usual for this time of year says DAT. Credit: DAT
DAT reports they declined 0.5% for vans August 7 through 11 compared to the previous seven days for an average of $1.85 per mile while the ratio of van loads-to-trucks increased 3.3%.
Rates for flatbeds also fell 1.4% to $2.17 per mile while reefer rates were unchanged at $2.20 per mile. The flatbed load-to-truck ratio fell 16% but improved 7.3% for reefers.
All this activity occurred while spot market loads overall declined 2.5% and fuel prices added 0.1% during the comparable periods.
DAT says despite the downturns rates are unusually strong on the spot market in mid-August, especially for reefers and vans.
Analyst Mark Montague wrote in his Freight Talk Blog, “Not only are rates higher than normal for the season, but there is unusually strong freight volume, as well. Produce harvests don't seem remarkable in any way, so it looks like other commodities are driving rates.”
He notes that flatbed demand and rates remained high through mid-July but they are slacking off now. “There was an element of pent-up demand in the flatbed segment this summer, due to weather-related delays in construction during the spring,” he wrote. “Rates never achieved the heights of 2012, though, due to a combination of tepid demand and increased flatbed capacity compared to last year.”
As for the van sector Montague noted rates did not hit their typical June peak this year, but they have spiked intermittently. “Now they are elevated again. We don't usually see a back-to-school spike on the spot market. Maybe the new hours of service requirement is putting pressure on rates,” he wrote.