I've been analyzing national trends in my recent blog posts about capacity and rates, but there are strong regional trends at play in this season, as well. I recognize that most of this blog's readers focus on a particular region, and many of those markets have their own unique character.
At this time of year, capacity is typically tight in the Southeast, throughout the Southwest and in California, but the Northeast and Midwest are relatively quiet. Reefer rates start their perennial climb, and van rates rise alongside them as vans can haul the commodities that don't require precise temperature control. Spot market load and truck postings, combined with the broker "buy" rates, give us a detailed snapshot of the hot markets and lanes, as well as some not-so-hot ones. For the purpose of this discussion, I have added fuel surcharges to the rates, which are from DAT Truckload Rate Index.
REEFER - Feel the heat!
Last year's harvest was interrupted repeatedly by catastrophic weather incidents, including floods, droughts and tornadoes. With this year's relative calm (knock wood!) seasonal produce is on the move and reefer rates are rising steadily. National average rates rose $0.03 (1.2%) and major markets gained 2.1% with rate increases in 64 top lanes.
Reefer rates from Northern California are up 6.6%, including the Sacramento and Fresno markets. Southern Arizona and South Texas are also heating up. In the Southeast, rates are rising in Atlanta and Miami. Rising stars include:
- Atlanta to Philly, up 23%, to $3.20 per mile, is one of the highest-paying reefer lanes over 400 miles.
- Phoenix to Salt Lake City, up 15%, to $2.71
- Sacramento to L.A., up 19% to $2.07, and Sacramento to Salt Lake City, up 10% to $2.82
- McAllen TX to Columbus, up 15% to $2.18, and McAllen to Dallas up 11% to $2.74
These were all lane averages for Monday, May 21st, based primarily on the previous 7 days. Keep in mind that things can change quickly on the spot market!
Rates slipped from Lakeland, FL and from other points on the East Coast. Out west, rates declined for reefers from Idaho and Utah. Lanes trending down included:
- Elizabeth NJ to Atlanta is the weakest major lane, at $1.29 per mile, due to the imbalance in volume that favors the Southeast
- Elizabeth to Raleigh slipped 17% to $1.54
- Philadelphia to Lakeland FL, down 9% to $1.84
- Idaho to L.A. down 15% and Salt Lake City to L.A. slipped 13%
VAN - Warming Up
National average rates remained stable last week. Rates advanced by an average of 1.6% in major markets, however, as 42 of our 64 key lanes saw rate increases, 21 declined and one was unchanged.
Dallas saw a 2.9% uptick in outbound van rates last week, and rates rose 1.0% out of Atlanta. Rates rose 5.0% out of Denver, but they are still below the national average.
- Atlanta to Chicago, up 14% to $1.69 per mile.
- Denver to Dallas, up 16% to $1.56
- Salt Lake City to Stockton CA, up 10% to $1.43
Outbound van rates slipped by about 2% in Columbus, Memphis and Stockton. Columbus rates are down 7.2% over the past four weeks,indicating a lack of uniform improvement in the Midwest. Memphis and Stockton rates were stable in the prior weeks, with Memphis still paying relatively well
- Philadelphia to Chicago is the lowest-priced major lane for the third consecutive week, at $1.03 per mile including fuel.
- Columbus to Philadelphia lost 8.5%, to $2.58
- Charlotte to Philadelphia, down 8.1% to $2.03
- Stockton to Denver, down 8.1% to $2.03
FLATBED - Southern Comfort
Flatbed rates are stable, as a national average, with not much fluctuation in load availability or capacity since the end of April. That doesn't mean flatbed rates are low, however. They hit close to last year's peak rate a few weeks ago, and then stayed there. When I look at individual markets and lanes, though, I see pockets of intense demand, especially in the Southeast. Trucks are hard to find -- so for a broker, that's Southern DisComfort!
Many of the higest rates are found in Southeastern markets, including Memphis, Atlanta, Savannah, Roanoke and Raleigh. Birmingham had very little activity earlier in the year, but demand is intense there now, driving rates up 9.1% in the past week. Reno, while not a strong flatbed market, posted an 8.9% increase to $1.79.
- Memphis was the hot market of the week, with the best overall average rate of $2.92.
- Lane rates from Raleigh to Baltimore were the strongest of the group, at $3.96 per mile.
- Cleveland to Harrisburg paid $3.19 per mile, well above the $2.32 average outbound rate for the Cleveland market.
Central and Northern Florida markets are not offering much in the way of Southern hospitality to flatbed carriers this month. Jacksonville rates declined 12% in the past month, but leveled off to $2.25 last week. Tampa paid $1.89 per mile for flatbeds last week, the lowest rate among the top 76 markets. Rates from Pittsburgh and Phoenix also averaged under $2.00, including fuel.
-Tampa to Atlanta was the weakest lane, at $1.57 per mile. (Outbound rates from Atlanta are among the highest, however, at $2.64.)
- Reno to Los Angeles paid an average of $1.70.
But tight flatbed capacity isn't just in the South! Let me know where you seeing high rates, tight capacity.