July has historically been a quiet month for trucking freight. Not so, this year. The national average van rate was $2.29 per mile, just 2 cents lower than the June peak.
To put July in context, remember that spot market rates in June hit the highest monthly average for vans, reefers and flatbeds since 2010, when DAT established the original spot rates database. It’s reasonable to assume that June spot rates were the highest ever, but there was simply no supporting data before 2010. So if July rates land a couple of pennies below June, that’s still crazy high.
DAT load boards provide the largest and most trusted digital freight marketplace in the trucking industry, with more than 270 million load and truck posted annually, plus insights into current spot market and contract rates based on $57 billion in real transactions.
The load-to-truck ratio declined to 6.9 loads per truck for vans last week, with tight capacity in distinct regions across the South, along both coasts, and in parts of the Midwest. Despite seasonal declines, July will go on the books as the second-strongest month this year for van ratios, and second-strongest for rates since at least 2010.
Contract van rates are also the highest ever, but unlike spot rates, average pricing on longer-term, shipper-to-carrier contracts continued to rise in July. When the average fuel surcharge is added, contract carriers are getting $2.36 per mile, while spot market transactions paid $2.29 to the truck.
That 7-cent gap between spot market and contract rates may widen in the third quarter, as contract rates continue to trend up. Then the gap could narrow again before the end of the year, as spot rates respond to the seasonal demand. That happened in Q4 of 2017, and this year’s fall freight season could be even more intense. We’ll know more in a few weeks.
Categories: Rate Trend of the Week