The weather had a huge impact on last week's freight movements, including some unexpected developments.
Certain secondary markets were used as staging areas for freight that was sidelined by storms. For example, beginning two weeks ago, snow and ice impeded freight flows into the largest metro areas on the East Coast, and loads were diverted to and/or held over in Buffalo, NY.
Then last week, outbound rates skyrocketed from Buffalo, rising 44¢ (23%) per mile to $3.04, according to spot market rates in DAT RateView. The lane rate from Buffalo to Philadelphia added 61¢, and the return trip from Philly dropped 67¢, offsetting the increase in the headhaul rate. Outbound rates from Philadelphia lost 9¢ (4.3%) on average last week.Other lanes were affected as well, including a 21¢ (7.9%) boost on the route from Charlotte to Buffalo, to $2.86 per mile.
You would expect the adverse weather conditions to stop traffic into and out of Buffalo, and that happened too, but not until the beginning of this week. Snow accumulation led to closures of Interstate 90 between Western NY State and the Pennsylvania border on Tuesday, January 7, according to the Weather Channel. Indeed, today's spot market rates from Buffalo to Philly dropped back to $2.61. This is still a fine rate, but the driving conditions are truly lousy, and pent-up demand may drive the rate back up to $3.04 or thereabouts when the roads are clear again.
Meanwhile, the rate from Philly to Buffalo rocketed up this week, from $2.04 to $2.50, including fuel. That's because a trip to Buffalo is not all that attractive when your truck could be marooned there. The rate bump is an incentive, to encourage hardy carriers and drivers to take that chance.The rate from Charlotte to Buffalo dropped back to $2.51 this week, however, just below the average rate for December, and well below the $2.86 average that carriers were paid in that lane just last week.
My summary for this week's rate trend: Tough conditions make for big rate swings. If you can postpone freight movements until the weather improves, you will usually find that "what goes up must come down."
I was interviewed by DC Velocity last week, and I was pleased to have the opportunity to share some of the same insights with that magazine's readers that I've been posting for you here on the DAT Freight Talk blog. I was also quoted in Forbes, along with David Schrader, DAT's Senior Vice President of Operations. If you have been following this blog, most of the material in these articles will seem familiar, but it's still nice to see this kind of validation in the press.
If you have an ongoing interest in truckload freight volume, capacity and rates, check out weekly updates at DAT Trendlines. For a more detailed, deeper dive into rate trends, as well as lane-by-lane rate comparisons and benchmarks, call our sales and support team for a demo of DAT RateView. We are offering a free lane look-up, to give you a better idea of how our data can support your pricing strategies. Call 800-551-8847 or fill out this online form to speak to someone about the product.
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