Freight Abounds, but Rates Return to July Levels

We expected the sizzling hot freight market to cool off a little, and it did. An 8% drop in load posts on DAT load boards last week pushed load-to-truck ratios down, and average rates also declined a few cents per mile for all equipment types. It looked like a big deal when compared to record highs of the previous two weeks, but we’re back where we were in July. And that was a pretty good place to be.

I’m gonna change things up a bit, and start with reefer this week. Just because.

Reefer Rates Lose 4¢, as Focus Shifts to Midwest

A seasonal transition is underway in produce harvests, as we head into the back-to-school season, so there is lots of demand for temp-controlled transportation. Central California is still active, and imported produce continues to be a factor at border crossings with Mexico, as well as seaports including Miami. The rest of the Southeast is pretty quiet now. Meanwhile, the Midwest appears to be coming online. Is it apple season yet? National average rates lost 4¢ pert mile last week, compared to the week before, bringing that number down to the July average of $2.08 per mile. The decline is a normal seasonal trend, reflecting a change in the mix of cargo and lanes.

HOT MARKETS – There was an increase in loads moving out of Fresno last week, which is a welcome change. Fresno had been a little disappointing until now, but it may yet produce the post-drought volumes of fruit and vegetables that we’ve been hoping for. McAllen, TX also got a boost, likely from cross-border traffic. Twin Falls, ID is trending up, which usually means that a potato harvest is underway, although it could be potatoes from storage or even frozen food for the back-to-school season. Outbound reefer demand also got a boost, along with rates on some lanes leaving from Grand Rapids, MI and Green Bay, WI. That could also be part of the back-to-school push. Bonus question: What do you get when you combine spuds from Twin Falls with cheese from Green Bay? Potatoes au gratin in the school cafeteria! Yum!

NOT SO HOT – Volume dropped last week out of Dallas, Philadelphia, Elizabeth NJ, and Lakeland in Central Florida, but outbound rate trends were not consistent. For example, outbound volume dropped in the Elizabeth market of Northern NJ, but rates rose by an average of 9¢ per mile. That could be due to refrigerated and frozen processed food for the back-to-school season that’s only a couple of weeks away.

Van Freight Abounds, but Rates are Down

We did have a dip in load availability last week but there’s still a lot of freight out there for vans. We’re two weeks into August, and this is still the strongest start for any month in more than a year and a half. National average rates dropped the 3¢ per mile that they had gained in the previous week, so — as with reefers — we’re back to where we were in July.

HOT MARKETS – Outbound rates were trending down in most major markets. The exceptions were Denver and Philadelphia, where rates edged up a couple of pennies. Denver tends to improve when rates decline everywhere else, because it’s almost entirely a backhaul market. The Philly market is home to some large distribution centers, as is its neighbor Allentown, so that whole area got a little lift from freight heading to even bigger population centers in the Northeast. It’s just 100 miles from Philly to New York City, so it’s a convenient place to stage retail freight.

NOT SO HOT – Texas slowed down, and outbound rates dropped in Dallas and Houston. Charlotte and Atlanta also lost traction. The last to fall was Buffalo, which could mean that the back-to-school wave is already winding down for van freight. As I mentioned earlier, most of the merchandise is being staged closer to its final destination, notably in the Philadelphia market. Meanwhile, an intermodal-competitive lane got a surprising boost in both directions: Chicago to Los Angeles rates rose 13¢ per mile last week, and the return trip paid 10¢ more, compared to the week before. You’ll still average about $1.40 per mile, which is no great shakes, but the increase is a positive sign for trucking overall.

Find loads, trucks and lane-by-lane rate information on DAT load boards, including rates from DAT RateView.