Are High Freight Rates in December the New Normal?

There have been strong signs of growth in the spot market since May, but it had mostly been a slow-and-steady climb. That changed last week. December started with the highest week of volumes that we've seen on the spot market in the past two years. Part of the uptick in loads was because people were back at work after taking time off for Thanksgiving, but the bigger driver was the economy -- especially e-commerce.

Load availability soared in places like Denver and Memphis. Both those markets are distribution hubs for e-commerce, which has stretched the traditional holiday retail freight season well into December. In fact, van rates have gone up in December for the past three years, and this year looks to continue that trend. Winter weather in the Upper Midwest and Northeast is also leading to tighter capacity and higher prices in those regions.


Darker areas have higher load-to-truck ratios, meaning there's less competition for van loads in those states.

A lot of holiday freight heading into the Northeast ends up in distribution centers in Allentown, PA, which has led to higher inbound rates there. Van rates on the lane from Columbus to Allentown have averaged $2.96 per mile in the past week, and Buffalo to Allentown is up to $2.98 per mile. Out West, the number of loads tripled on the lane from Denver to Los Angeles. Prices were also up on the lane from Denver to Phoenix.

The flipside of higher outbound rates in Denver is that inbound rates tend to fall. Van loads heading from L.A. to Denver paid 15¢ less last week at $2.45 per mile. Rates were down in general out of L.A. and Stockton, CA, which include sea ports. Most holiday freight arriving by sea is already here, so the ports are less active than they were in November.


Darker areas have higher load-to-truck ratios, meaning there's less competition for reefer loads in those states.

Reefer trends haven't been quite as dramatic, but the national reefer rate in November did end up 6¢ higher than October’s average. Load posts bounced back on DAT Load Boards after Thanksgiving, but rate trends varied a lot from one market to the next.

One thing reefers and vans had in common was that there were a lot more loads available last week in Denver. Other reefer markets with big gains were in metro areas with a lot of refrigerated warehousing, including Chicago, Dallas, and Elizabeth, NJ. Reefer rates bounced back in Southern Idaho after a down week.

Produce is doing pretty well for the post-Thanksgiving lull, but there were still some pretty big price drops on lanes out of some agricultural markets. Crops out of the Green Bay market are mostly finished, and prices fell hard in some outbound lanes. Out of California, reefer loads paid less in Ontario and Fresno.

Lane-by-lane rate information and Hot Market Maps are available in the DAT Power load board. Rates are based on DAT RateView, with $28 billion in lane rates, updated daily, for 65,000 point-to-point lanes across North America.



Matt Sullivan

Matt Sullivan is the editor of DAT Carrier News. He has more than 10 years of journalism experience.



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