National average van rates are sliding, but they’re still a few cents above the June average, so the typical mid-July slump isn’t as bad for some truckers as it was in previous years. A downturn in July is a normal seasonal trend on the spot market, but it’s sometimes followed by a rebound in August and September. Reefers may get a pay raise then, too, when grocers stock up on fresh food for back-to-school season.
Van Rates Decline in 3 Biggest Freight Markets
Atlanta, Dallas and Houston are the top three markets for load posts on DAT load boards, but outbound van rates are dropping in all three places. When rates fall in head haul markets, however, the back haul rates tend to rise. You don’t have to go into Denver or Seattle to enjoy a rate increase, just be aware of the trends in both directions of your round trip before you choose a load and a destination.
Load-to-truck ratios tell you where demand is the "hottest" compared to the number of trucks that are available in that state. You can have a high load-to-truck ratio where there aren't a lot of loads. though. Here are the five states with the most van loads posted last week. Only Texas had a load-to-truck ratio above the national average of 2.5 loads per truck:
VAN - Top 5 States for Load Posts - July 17 - 23
- Texas (with a load-to-truck ratio of 2.6)
- Illinois (1.7)
- Ohio (1.8)
- Georgia (2.4)
- Pennsylvania (2.0)
Reefer Rates May Rebound Soon
Reefer load volumes continued to drop seasonally last week, especially in Southern California. Reefer rates are also lower than they were in June. It’s a typical seasonal decline, but this year’s July slump started later and it’s happening more slowly than in 2015. That's the good news. Not so good: rates started out lower this year than in the summer of 2015, so they don’t have as far to fall.
Better: outbound rates rose last week for reefers in Chicago, Dallas and Twin Falls, ID. And reefer rates get a bump from back-to-school inventory build-up at supermarkets. Frozen food should be moving soon, with fresh food following in mid-August.
If you're looking only at load-to-truck ratios on the map above, you'd be pointing your reefer toward New Mexico or Arkansas right now. Arkansas is always a good bet, but there are a lot more reefer loads available in Texas, California and Illinois. Unfortunately, the load-to-truck ratios aren't above the national average of 4.4 in any of the top 5 states for reefer load posts:
REEFER - Top 5 States for Load Posts - July 17 - 23
- Texas (with a load-to-truck ratio of 3.6)
- California (3.1)
- Illinois (3.4)
- Georgia (2.5)
- Pennsylvania (2.8)
As you can see on the map, Central Florida rates are down in the off-season, Central California is not at its peak, but rates are holding up, and Green Bay, WI is becoming a Hot Market.
DAT TriHaul of the Week, for Reefers: Chicago - Atlanta - Memphis - Chicago
The lane rates are constantly adjusting for reefers in both directions between Chicago and Atlanta. This week, you’ll average about $1.78/mile on the 1,400-mile roundtrip. You can do better with a TriHaul. Here's the math:
Take a load – it could be meat or packaged food – from Chicago to Atlanta for about $2.16/mile. Then find a load from Atlanta to Memphis. That lane is paying $2.77/mile right now, so it’s worth the detour. For the third leg of your trip, a reefer load from Memphis to Chicago pays $2.13/mile. You’ll boost your average rate on the return trip by $1.00/mile, and add almost $1,200 to your total revenue with only 200 more loaded miles.
You might also add a day to your trip, so that’s a factor for consideration. If Memphis doesn't fit into your schedule, try Cape Girardeau, MO. Or think about running two TriHauls back to back, to round out your week.
Lane-by-lane rate information and TriHaul route recommendations are available in DAT load boards. Rates are based on DAT RateView, with $28 billion in lane rates, updated daily, for 65,000 point-to-point lanes across North America.
Categories: Rate Trend of the Week