Fallout from Hurricane Matthew and the Hanjin Shipping bankruptcy helped push spot market rates higher over the past week, according to the freight matching service provider DAT Solutions, while a separate report shows rates in September were mixed when compared to the previous month and a year ago.
Based on activity from the DAT network of load boards, the increase in national average spot truckload rates for the week ending Oct. 8 compared to the previous week happened as load-to-truck ratios decreased across all three equipment types.
The national average van rate increased 6 cents to $1.68 per mile while flatbeds posted a 4 cents gain for an average of $1.92 per mile. Reefers showed the weakest improvement, just a penny, also for an average of $1.92 per mile. All three are at their highest levels in at least the last four weeks and include fuel surcharges.
“These conditions are partly attributable to Hurricane Matthew,” the company said. “The storm’s effects likely contributed to higher van rates and lower freight volumes as shippers paid more to move freight early in the week before reducing their activity later.”
DAT is forecasting inbound rates could go up in hard-hit areas like the Carolinas this week.
Last week the van load-to-truck ratio dropped 9% to 2.8 to 1, as the number of posted van loads fell 7% and truck posts rose 2%, unusual for a week with a 6-cents increase in the average van rate, according to DAT.
Reefer load posts declined 4% while truck posts increased 3%. The result was a 7% decline in the reefer load-to-truck ratio, 5.6 to 1. The flatbed load-to-truck ratio fell 7% to 13.4 to 1, after flatbed load posts declined 6% and truck posts increased 1%.
The Hanjin Shipping Co. bankruptcy continues to affect demand on the West Coast, as Los Angeles was again the leading market for van load posts by a wide margin, said DAT. The load-to-truck ratio there was 7.4 to 1, well ahead of the national average. Eastbound freight remained solid for carriers. For example, L.A. to Elizabeth, New Jersey averaged $1.74 per mile.
Van rates rose on more than half of the highest-volume lanes. The high-dollar market in each region:
- West: Los Angeles, $2.06 per mile, up 4 cents
- South Central: Dallas, $1.50 per mile, up 1 cent
- Southeast: Charlotte, $1.92 mile, up 3 cents
- Northeast: Buffalo, N.Y., $2.00 per mile, up 6 cents
- Midwest: Chicago, $2.03/mile, up 2 cents
Last week there were also high dollar reefer lanes, but they were volatile.
- West: Ontario, California-Phoenix, $2.86 per mile, up 3 cents
- South Central: Dallas-Houston, $2.32 per mile, down 7 cents
- Southeast: Atlanta-Lakeland, Florida, $2.70 per mile, down 11 cents
- Northeast: Elizabeth-Boston, $3.53 per mile, down 15 cents
- Midwest: Grand Rapids-Cleveland, $3.48 per mile, up 2 cents
Also, out of Grand Rapids, the lane to Atlanta dropped 53 cents to $2.23 per mile, which gives you a good idea of how mixed the trends were last week, according to DAT.
Spot Freight Posts Second Straight Monthly Improvement
A separate and also new report from DAT for September shows overall spot truckload freight availability climbed 12% last month, compared to September 2015, as the number of loads on the spot market surpassed same-month levels from the previous year for the second consecutive month.
In August, the spot market enjoyed the first year-over-year increase since December 2014, according to the DAT North American Freight Index. This pushed the measure higher from the same time a year ago, as well as compared to 2012, but remains below the levels from 2013 as well as 2014’s exceeding high watermark.
Dry van and refrigerated van freight increased by 33% and 27%, respectively, but flatbed freight volume slipped 13% compared to September 2015. Flatbed volume has declined on a year-over-year basis for the past 15 months, due to a downturn in economic sectors, such as oil and gas, that produce flatbed freight, according to DAT.
Month-over-month, spot market freight volume edged up 0.6% to the second-highest level this year. This is an atypical seasonal pattern as September volume declined month-over-month in eight of the previous 10 years. A 2.7% increase in van freight volume was responsible for the month-over-month growth, as reefer volume dipped 1.1%, and flatbeds lost 1.9% in September, compared to August.
The increase in van freight volume boosted spot market rates by 1.4%, and reefer rates added 0.6%, month-over-month. September flatbed rates declined 1.2% compared to August, however, in a common seasonal pattern.
On a year-over-year basis, the average line haul rate fell 6% for vans, 4.5% for reefers, and 7.8% for flatbeds, compared to September 2015. The average fuel surcharge, a component of the total rate paid to carriers, fell 9.1% year over year, deepening the decline in carriers' total revenue per mile. The surcharge is pegged to the retail price of diesel fuel.