Strong load-to-truck ratios during the final week of 2016 led to some of the highest spot truckload rates of the year, according to DAT Solutions and its network of load boards.
The number of posted loads outpaced trucks during the week ending Dec. 31, traditionally a slow period for freight. Load availability fell 17% while capacity dropped 29%, however, tighter capacity led to higher load-to-truck ratios. Flatbeds posted the biggest gain, 27%, hitting 26.8 to 1, followed by reefers adding 19% at 11.2 to 1. Vans increased 9% at 4.3 to 1
This also lead to upticks in spot rates in the three major categories, with all tying or setting new four-week highs. Vans and reefers each added 2 cents from the previous week, hitting an average of $1.73 per mile and $1.99 per mile, respectively. Flatbeds increased 1 cent for an average of $1.95 per mile.
Spot rates include a fuel surcharge. The national average price of on-highway diesel rose nearly 2% during this time, hitting to $2.59 per gallon.
Van load posts fell 22% but truck posts dropped 29%. While activity slowed overall, retail distribution centers continued to drive van freight activity as shippers rushed to move loads before they closed the books on 2016, according to DAT. This led to higher rates out of several key markets, due to strong retail trade:
- Los Angeles, $2.16 per mile, up 5 cents
- Columbus, $2.14 per mile, up 7 cents
- Dallas, $1.60 per mile, up 4 cents
- Atlanta, $1.99 per mile, up 6 cents
- Philadelphia, $1.77 per mile, up 6 cents
While van trends were positive last week, reefer trends were off the charts. That’s because the shipment of southern crops happened to overlap with additional demand for fall crops that moved out of storage, reported DAT.
There was more demand for reefers in the Midwest to prevent freezing of temperature-sensitive cargo. Put it all together and you get an unusually strong rebound in reefer rates, with a national average rate that matched the June peak. Key lanes include:
- Grand Rapids, Michigan-Cleveland, $3.63per mile, up 64 cents. Apples and a few weeks of intensely cold weather contributed to the soaring prices.
- Dallas-Phoenix, $1.71 per mile, up 48 cents
- Chicago-Denver, $2.96 per mile, up 65 cents
The number of flatbed load posts fell 16% but truck posts fell 34%. That pushed the load-to-truck ratio up 27% to 26.8 loads per truck nationally, the highest weekly flatbed ratio since June of 2015. Initial numbers show when December’s load-to-truck ratio is compared to the same time in 2015, it jumped a whopping 167%.
This overall increase in rates and activity led DAT Analyst Mark Montague to proclaim in the DAT blog this week the freight recession that began 18 months ago, triggered by the collapse in worldwide oil prices, is over.
“Freight volume and rates finally began to revive in May 2016, and year-over-year volume comparisons turned positive in August,” he said. “Instead of tapering off after October, as retail freight did in years past, a boom market emerged for truckload transportation in November and December. E-commerce was a major source of spot market freight for what is usually a quiet season, boosting truckload rates to a surprise peak in the last two months of the year.”
You can read more of Montague’s analysis in the DAT blog.