California Freight Heats Up, Spurred By Hanjin Collapse

Spot market activity often ramps up in the West during the fall season, but there’s added pressure this month. Hanjin Shipping recently filed for bankruptcy, and a number of its ships pulled into port last week, after a lot of delays and uncertainty. Hanjin is the world’s seventh-largest commercial shipping company, and it’s struggling to find the money to unload its ships.

That started a ripple effect on the whole supply chain, which includes trucking. Since two of the re-scheduled ships docked in the twin seaports of Los Angeles and Long Beach over the weekend of September 10-11, demand has surged for vans in the L.A. area, especially on eastbound lanes.

A Hanjin ship passing the Golden Gate Bridge – Photo by Basil D Soufi

Even if they didn’t have cargo on Hanjin ships, big retailers are starting to shift inventory from West Coast distribution centers to other DCs farther east. October is a critical month for retail freight in advance of the Christmas season, and retailers want to prevent stock-outs while they wait for Asian imports to clear through congested docks and warehouses on the West Coast. Those eastbound freight moves will become more urgent, and rates are likely to rise further, as Black Friday draws closer.

The load-to-truck ratio in Los Angeles lit up the entire state of California on the DAT Hot States map. Van trends are more mixed in the Midwest, and rates are moving down in the East.

The uncertainty at the sea ports boosted L.A. up to the number-two spot for load posts on DAT load boards last week, and by today, L.A. appears to be edging out Chicago for first place. Other West Coast markets with rising rates include Seattle and Stockton. Those two markets have benefited from harvests in August and September, but last week’s volume may also include ocean freight from the ports of Tacoma and Oakland, respectively.

On the down side, there were fewer loads moving out of Columbus and Chicago last week, but outbound rates remain strong in the Midwest. Prices slipped in the Northeast, though. Allentown PA outbound rates lost traction, and Buffalo NY rates gave back the previous week’s gains.

Keep track of up-to-the minute changes in truckload demand and capacity, and find the loads and trucks you need on DAT load boards. Then negotiate from strength, with detailed information from DAT RateView, on the latest truckload rates in your business-critical markets and lanes.