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Spot Van, Reefer Rates Dip; Hanjin Bankruptcy Could Push Them Higher

September 21, 2016

By Evan Lockridge

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The number of loads on the DAT network of load boards gained 20% during the week ending Sept. 17 compared to the week before and the number of trucks added 19% as the spot market rebounded during the first full week after the Labor Day holiday but it barely translated into higher rates.

The national average van rate dropped 2 cents to $1.64 per mile and the reefer rate declined 2 cents to $1.91 per mile. The national average flatbed rate rose 2 cents last week to $1.89 per mile.

This happened as the national average cost of diesel registered $2.39 per gallon, down 1 cent from the week before. All reported rates include fuel surcharges.

The load-to-truck ratio for vans fell 4% to 3.1 loads per truck as van load posts increased 15% and truck posts jumped 21%. In contrast the flatbed load-to-truck ratio improved 8% to 13.2 loads per truck due to a 33% increase in load posts and a 22% gain in truck postings following an overall 21% hike in the ratio the week before at a time of year when it typically declines. Reefers moved up just 0.6% to 6.1 loads per truck as reefer load posts increased 14% and truck posts improved 13%.

Outbound van rates got a boost in several Western markets, including Los Angeles where the average rate added a penny to $2.02 per mile. As the bankruptcy of Hanjin Shipping Co. ripples its way through U.S. ports, DAT notes an 18% increase in loads week over week in the top seven van lanes out of the Los Angeles market, which includes the ports of L.A. and Long Beach.

According to DAT Analyst Mark Montague Hanjin’s bankruptcy will no bout complicate efforts to get products from Asia to U.S. retailers' shelves before Black Friday, but that could benefit trucking.

“One possible outcome could be a surge in demand and rates for trucks, possibly beginning in the next few weeks,” he wrote in the DAT blog. “Missed schedules could keep rates high well into November, when the holiday freight season would ordinarily start to wind down.”  

Meantime last week, outbound reefer rates rose 15 cents to an average of $3.13 per mile in Grand Rapids while Green Bay averaged $2.64 per mile on a spike in reefer volumes although rates fell sharply in some key lanes.

The average Grand Rapids to Cleveland rate rose 26 cents to an average of $3.50 per mile. Reefer rates were generally lower in California. Rates from Sacramento fell 14 cents to $2.25 per mile, giving back the previous week’s gains. Rates slipped 4 cents in Los Angeles to $2.35 per mile while Elizabeth to Boston gained 16 cents to $3.53 per mile. Reefer rates from Elizabeth averaged $1.73 per mile, a 3 cents increase last week.

Flatbed rates increased an average of 9 cents last week to $2.91 per mile on major outbound lanes originating in Harrisburg, Pennsylvania., where rates have picked up 5% since the end of July.

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