Dry Van Report: The coastal import shift to the east coast continues

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Following the import shift from the U.S. West Coast to the East Coast, some ports are well-positioned to make this permanent, with growth plans on the horizon in 2023. One such port is South Carolina’s Port of Charleston. Last year South Carolina Ports Authority (SCPA) opened its new 1,400-foot berth at the Leatherman Terminal, predicting the floodgates will open, allowing much larger container vessels in the 20,000- TEU category to add Charleston as a destination for imports. Stage two of that project was the deepening of the port to 52 feet to allow the biggest ships calling the East Coast can access South Carolina Ports’ terminals any time, any tide. 

According to S.C. Ports President and CEO Barbara Melvin, “It is a historic moment to celebrate this monumental achievement. With the deepest harbor on the East Coast, we can efficiently work mega container ships at any tide. This investment will bring economic success to South Carolina for generations.” Deepening work began in 2018, thanks to $300 million the state set aside in 2012, followed by several infusions of federal funding. In 2019, Congress appropriated $138 million for the project, funding it to completion.

Further south in the Port of Savannah, the Georgia Ports Authority (GPA) announced they would renovate and realign the docks at the Port of Savannah’s Ocean Terminal to accommodate the growing number of containers moving through the port. According to GPA executive director Griff Lynch, “For nearly 40 years, Ocean Terminal has been handling a mix of container ships and breakbulk vessels. The realignment is part of a broader effort to transform the terminal into an all-container operation, shifting most breakbulk cargo to the Port of Brunswick.”

GPA plans to shift breakbulk cargo carried by Wallenius Wilhelmsen Ocean to Colonel’s Island Terminal in Brunswick. There, construction has started on 360,000 square feet of dockside warehousing that will serve auto processing, three additional buildings, and 85 acres of auto storage space on the island’s south side. For truckload carriers, both ports represent around 2% of total breakbulk tonnage imported annually. Still, due to the coastal shift in imports, they have seen volumes increase by 23% y/y in Savannah and 121% y/y in Brunswick. Those numbers will only continue to grow.

Market Watch

All rates cited below exclude fuel surcharges unless otherwise noted.

At $1.95/mile for outbound loads, capacity tightened slightly in California last week, although last week’s gain was only a penny-per-mile, the smallest weekly increase in the previous month. In Los Angeles, the most prominent spot market in the state, spot rates were up by $0.04/mile to $1.82/mile. On the high-volume lane north to Stockton, rates were up $0.21/mile above the November average to $2.80/mile last week. Loads east to Phoenix were flat at $2.76/mile, the lowest in 12 months, while loads to Dallas were up to $1.72/mile, which is just over $0.20/mile high than in November. Dry van capacity continues to tighten along the southern border following another $0.03/mile increase last week to an average outbound rate of $1.82/mile.

In Laredo’s largest southern border market, load posts increased by 12% w/w, pushing up spot rates by $0.02/mile to $1.84/mile. Loads north to Omaha came at a premium as the region was hit by heavy snow and blizzard conditions resulting from Winter Storm Diaz. Loads from Laredo to Omaha at $2.87/mile were $0.13/mile higher y/y and over $1.00/mile higher than the November average. The storm also resulted in dry van rates increasing by $0.06/mile in the Upper Midwest and Northern Plains Regions as reports of blizzards stranding truckers for days along Interstate 80. 

Load-to-Truck Ratio (LTR)

Load posts were uncharacteristic flat last week. Typically, we’d expect to see average spot market volumes increase by 10% w/w, but not this year. Carrier equipment posts remained at the highest level in six years and around 28% higher than in 2019. As a result, last week’s dry van load-to-truck ratio (LTR) increased by 8% w/w from 2.78 to 3.00. 

Linehaul Spot Rates

After being flat for the prior two weeks, the national average dry van rate increased by just over a penny-per-mile last week to $1.82/mile. Compared to previous years, last week’s national average is $0.75/mile lower than in 2021 but still $0.16/mile higher than in 2019. The national average linehaul rate of $1.82/mile is $0.28/mile lower than the top 50 dry van lanes based on the volume of loads moved, which averaged $2.10/mile last week, the same as the previous few weeks.

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