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Spot Truckload Freight Market Sees Weekly, Monthly Gains

January 11, 2017

By Evan Lockridge

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Unseasonably high freight volumes combined with higher fuel prices and rough winter weather pushed spot truckload rates upward to start 2017, according to DAT Solutions and its network of load boards, while a separate measure showed the market improved for the sixth straight month in December.

The total number of posted loads increased 17% while available capacity was up 9.5% during the week ending Jan. 7 compared to the previous week. National average rates for reefers increased 5 cents to an unseasonably high $2.03 per mile while van added 4 cents for $1.77 per mile. In contrast, the average flatbed rate fell 3 cents to $1.92 per mile.

All rates include fuel surcharges and this most recent activity happed as national average price of on-highway diesel gained a penny to $2.60 per gallon.

This tighter capacity pushed van and flatbed load-to-truck ratios higher, while refrigerated freight dipped. The van load-to-truck ratio increased 10% to 4.9 loads per truck while flatbeds jumped 7% to 28.6 loads per truck. Reefers fell 4% to 10.7 loads per truck.

Van activity picked up gradually in the week following the holidays. Van load posts were up 20% compared to the previous week and truck posts increased 9%. But rates fell sharply in many key markets over the past week especially in the Midwest and West including:

  • Los Angeles, $2.08 per mile, down 8 cents
  • Chicago, $2.12 per mile, down 11 cents
  • Houston, $1.57 per mile, down 2 cents
  • Atlanta, $1.96 per mile, down 3 cents
  • Philadelphia, $1.75 mile, down 3 cents

Demand for reefer trucks slipped compared to the boom week between Christmas and New Year's but the load-to-truck ratio remained unseasonably high. Spot market load posts increased 3% but truck posts rose 7%. According to DAT, freight volume kept climbing in Nogales, Arizona with Mexican produce crossing the border, and load counts also started the year strong in Philadelphia, a big market for produce imports from Europe.

Despite these improvements average rates on several reefer lanes declined last week:

  • Chicago-Denver, $2.11 per mile, down 86 cents
  • Dallas-Phoenix, $1.30 per mile, down 42 cents
  • Miami-Baltimore fell to pre-Christmas levels at $1.72/mile
  • Elizabeth, New Jersey-Boston came back down 38 cents to $3.50/mile: still high but traffic and weather make travel difficult on that lane, plus there’s not much freight coming out of Boston.

Flatbed load posts increased 26% and truck posts increased 18% last week. That pushed the load-to-truck ratio up to its highest level since September 2014.

December Index Shows Continuing Improvements

Meantime, a separate reported showed The DAT North American Freight Index rose 8% in December, capping off an extraordinarily strong month for spot truckload freight and six straight months of increased volume.

E-commerce and grocery items were major sources of December freight for what is usually a quiet period on the spot market, according to DAT.

"Van rates and volumes shot up in places like Memphis and Columbus, both associated with e-commerce fulfillment, and even Denver and Seattle exhibited unusually robust rates and shipping patterns," said Mark Montague, DAT industry analyst.

Van freight availability increased 10% compared to November and surged 52% year over year, for an average van load-to-truck ratio of 3.8 to 1, a 22% increase compared to November and 80% higher year-over-year.

The national average spot truckload rate for vans was $1.73 per mile including a fuel surcharge. The average rate was the highest for the year, up 7 cents month over month and 1 cent compared to December 2015.

Reefer freight availability increased 10% in December compared to November, primarily due to demand for fresh and frozen foods at Christmas. The reefer load-to-truck ratio of 8.2 to 1 was the highest monthly ratio in the past 21 months. Compared to December 2015, reefer volume was up 55% in December.

The national average spot market rate was $1.98 per mile for reefers, up 2 cents from November to December and equal to the June peak season average. Compared to December 2015, the average rate was 2 cents per mile higher.

Demand for flatbed trucks increased 2.3% compared to November and 48% compared to December 2015. Flatbed rates increased 5 cents compared to November, to $1.95 per mile. That national average was up 1 cent compared to December 2015.

Despite a strong second half of 2016, spot market freight volume for the entire year fell 7.7% compared to 2015.

"While overall demand for truckload capacity grew 23% in the second half of 2016, those gains were more than offset by a 29% decline during the first half," Montague said.

 

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