Van rates may fall as fast as they rose, as declining load-to-truck ratios signal the end of the coronavirus-fueled spike in spot freight. Retail inventories are still being depleted and replenished at a rapid pace, but the freight pipeline is depleted because of business closures all over the country. Plus, many consumers face sudden job losses, making them wary about discretionary spending.
As more and more cities and states institute measures in response to the COVID-19 threat, consumers have rushed to grocery stores to stock up for extended time at home. Store shelves are bare, but the truckload spot market is already mobilizing to meet the surge in demand.
COVID-19 is causing the mother of all supply chain disruptions. Two weeks ago, we worried that the gap in imports reduced demand and rates for trucks in seaport markets, but then consumers started emptying store shelves of cleaning supplies and canned goods.
Rates haven’t been all that high for flatbeds, but the national average has held in a pretty stable in a range of $2.15 to $2.18 per mile since October. As with dry van – and reefer for that matter – there’s more action for open-deck equipment in the Southeast, and rates are moving up on many high-volume lanes that originate there.
At some point, U.S. consumers may stay away from stores and other public places due to coronavirus fears, but for now they're shopping like crazy. It could be a busy spring for dry vans, as those inventories are being replenished continuously.
Van carriers may be glad to see February recede in the rearview, as rates and volume slid lower in a typical winter slump. As of last week, rates seemed to have hit a plateau, and truckload volumes were picking up. The much-anticipated spring recovery may be delayed or canceled, however, due to the impact of the COVID-19 coronavirus on supply chains worldwide.
Truckload rates are starting to show signs of life as we near the end of February. Expect the turnaround to expand to a growing number of lanes and markets across the country in the next few weeks.
February can be a tough month for transportation companies. Rates on many lanes hit their lowest points of the year during this stretch of winter, and prices were definitely trending downward to close January.
