Santa's helpers -- also known as truck drivers -- were out in force last week, moving tens of thousands of last-minute loads that need to reach their destinations before Christmas. After all, those gifts don't deliver themselves.
The urgency on the part of shippers has pushed the average van rate in December up to $1.92 per mile, 10¢ above November's average. That's still the highest monthly average since January, at $1.96.
Remember that the national average in DAT RateView is based entirely on over-the-road lanes of 250 miles or longer. There's even more pressure on lanes with shorter lengths of haul, where freight moves from on retail distribution center to another, and from distribution centers to retail stores.
That DC-to-DC traffic is typically handled by private fleets and contract carriers, but they are likely overwhelmed by seasonal demand right now. Also, there are a lot more distribution centers these days, as more retailers adopt an e-commerce model that emphasizes delivery speed over inventory costs. That adds up to a larger portion of the freight being offered to spot market providers.
What's the takeaway for truckers and freight brokers? Expect the urgency to continue through this week and into the first half of January, as retailers re-stock to get ready for a surge of customers with returns, exchanges, and gift cards.
The most recent volume and rate spikes aren't concentrated in a specific geographic area. Rates are rising in every direction, but the East-West freight corridors look the most promising for truckers who want to work through the holiday season. If you're looking for roundtrips, try to go back and forth between (or among) the top 6 states for load posts: Texas, Illinois, Ohio, Pennsylvania, California, and Georgia.
Hot Markets are everywhere
Looking at last week's top 100 van lanes, some of the biggest rate increases were on lanes from Chicago to Buffalo at $2.99 per mile, Buffalo to Columbus at $2.18, and Columbus to Memphis for $1.91. It shouldn't be hard to find a load from Memphis to Chicago, which paid $1.96 per mile last week and completes the big geographic circle. Do we call it a QuadHaul? Whatever. It could be good for someone who doesn't mind spending holidays on the road. The trickiest part is finding that first load from Chicago to Buffalo, so you could skip it altogether and head straight from Chicago to Columbus for $2.94 per mile. It didn't make the original list because rates rose "only" 5¢ per mile there last week.
For this week's Hot Lanes, I'm choosing 5 where the most van loads moved last week. Three of the 5 originate in California:
- Los Angeles to Stockton, CA had the most loads, at $2.76 per mile, unchanged from the previous week. The return trip paid $1.68, down a penny.
- Dallas to Houston is always popular. It paid $2.20 per mile last week, up 6¢. From Houston to Dallas, truckers got $2.01, unchanged. That's a nice roundtrip average, and there are lots of loads moving. Go for it.
- L.A. to Phoenix paid $2.88 last week on average, down a penny from the week before. The return trip from Phoenix to L.A., market to market, lost 2¢ to $1.33 per mile. That's not a high-volume lane, to say the least.
- Atlanta to Lakeland, FL, $2.75, up a penny. Don't expect any love on the return trip, though. It's a classic "buck-a-mile backhaul" at $1.01 per mile from Lakeland to Atlanta.
- Stockton to Ontario, CA at $1.61 per mile, rounded out the top 5. The northbound leg is the headhaul, at $2.65 per mile from Ontario to Stockton. Or add a stop in L.A. and make it a TriHaul.
If you are on the road, thanks for helping Santa, and stay safe. If you're enjoying some time at home, be assured that there will be plenty of freight to move next week, too.