Volume was way up last week. Was it a month-end spike, or real growth?
The month of July is typically time for a lull in spot market freight availability and rates. Even the last few days of July don't typically generate the same surge that we see at the end of other months.
What we had was just an unusually short-lived slump.
So why didn't rates rise last week, if the mid-summer slump is really over? When freight availability increases and load-to-truck ratios jump as much as they did last week, you would expect to see rates moving up as well.
In fact, we did see a pattern of rising rates, but not in all markets and lanes. In some cases, rates were stable or even declining, because carriers hadn't yet realized that those lanes were facing a new truck shortage. The last one barely ended. Plus, markets are in a transition right now, as seasonal freight, including produce, has mostly disappeared from the Southeast. Meanwhile, the Upper Midwest is gaining strength, but demand is waning for reefers and flatbeds, so some of the pressure is off.
What happens next? Rate trends will likely remain mixed for a while longer, as seasonal markets adjust. Notebooks and pencils are already on store shelves, but other back-to-school items, including perishable foods, have yet to be delivered. Plus, the Christmas freight season is not far off. Consumer confidence is way up, and retailers may order more than they originally planned. That means there will be exception freight, possibly lots of it.
All of these annual trends are taking place in a new pricing environment. Remember, rates are already higher than last year's, by as much as 15¢ per mile or more. Capacity is constrained, for all the familiar reasons: driver shortages and regulations top that list.
If a new burst of demand does materialize, we may see another peak in spot market rates before the third quarter ends. Look for van rates to remain at or above $2.00 as a national average, and possibly return to the $2.05 level before the end of September.