Low Reefer Demand Drags Down Van Rates

Spot market freight has stabilized in recent weeks, and last week we saw load-to-truck ratios rise for every trailer type. It hasn't yet been enough to put pressure on rates, though.

For one, lackluster contract freight volumes has led to more contract carriers putting trucks on the spot market, and the extra capacity has kept rates from rising in many places. Reefer demand has also been low, and when there isn’t enough reefer freight to go around, those trucks start competing for van freight.

Still, even with the extra van capacity, rates rose on 46 of the top 100 van lanes, compared to the 41 that moved lower. The other 13 lanes were neutral.


Load-to-truck ratios are highest for vans in the darker red areas on the Hot States Map, above.

Volumes surged in Allentown, PA. Load counts were also up in Philadelphia, but there were still enough available trucks to keep Pennsylvania from turning dark in the Hot States Map above.

As far as pricing goes, we usually consider it noteworthy when the average outbound rate in a major van market moves up or down 2%, and last week might’ve been the first time that no markets fit that description. The biggest gain was Allentown, which was up 1.8% thanks to that surge in volumes. Los Angeles rates were only down 1.1% last week, but they’re way down for the month. Part of that is due to bad weather, but soft contract freight also played a role.

All rates below include fuel surcharges and are based on real transactions between brokers and carriers.

RISING LANES

We did see prices recover on a handful of lanes:

  • Mudslides and detours on I-5 pushed the average rate from Seattle to Eugene, OR, up ▲21¢ to $2.28/mile.
  • Denver to Phoenix is still a weak lane at $1.20/mile, but that average is up ▲11¢ from the week before.
  • Chicago to Buffalo also rebounded ▲10¢ to pay an average of $2.33/mile last week

FALLING LANES

Van moves between Columbus and Memphis are usually associated with retail, and unlike a lot of lane pairs, prices on those lanes tend to go up and down in tandem. Last week they were down:

  • Columbus to Memphis fell ▼17¢ to just $1.47/mile
  • Memphis to Columbus was down ▼10¢ to $1.67/mile
  • Columbus to Buffalo also slipped lower at an average of $2.48/mile


Load-to-truck ratios are highest for reefers in the darker blue areas on the Hot States Map, above.

Last week, we talked about how it looked like van rates had reached the bottom, and it’s looking like that may now be the case for reefer rates. Volumes have been pretty consistent as of late.

Two weeks ago, Miami was the big story, but that surge in reefer loads down there has mostly run its course. The activity last week moved a little north up to Lakeland, FL. It again wasn't enough to turn the whole state of Florida dark in the Hot States Map above, but the winter crop shipments were enough to boost outbound rates in the central part of the state by more than ▲4%.

California volumes were still lackluster, so still no improvement out there.

RISING LANES

Warmer weather also propelled some lanes where some commodities suddenly needed protection from heat:

  • Philadelphia to Boston paid ▲18¢ better on average at $3.46/mile
  • Grand Rapids to Cleveland rose ▲29¢ to $3.31/mile
  • Denver also picked up some shipments to Texas: The lane to Houston paid ▲16¢ at $1.77/mile

FALLING LANES:

Miami fell back to earth, and several lanes had big drops, including the lane to Elizabeth, NJ, which fell ▼17¢ at $1.67/mile

The warmer weather had the opposite effect on other lanes, where some commodities suddenly didn’t need to be protected from freezing:

  • Green Bay to Minneapolis was down ▼22¢ to $1.89/mile
  • Grand Rapids to Philly fell ▼18¢ to $2.70/mile

Find loads, trucks and lane-by-lane rate information in the DAT Power load board, including rates from DAT RateView.



Matt Sullivan

Matt Sullivan is the editor of DAT Carrier News. He has more than 10 years of journalism experience.



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