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Rates rose last week on the spot market. In the words of the great American philosopher Yogi Berra: “It’s like déjà vu all over again.”
VAN – Freight has been unusually strong for the entire second half of this year. Van rates rose in July instead of dropping, as is typical for the season. Even as freight volume finally tapered off after Thanksgiving, rates remained high. During Christmas week, van rates rose even further. The national average hit a peak of $1.95 per mile in the last full week of the year.I don’t think I’ve ever seen that before, and I’ve been a transportation pricing analyst for decades.
FLATBED – Rates slipped for flatbeds last week, but with some bright spots for carriers. The month of December as a whole brought double-digit rate increases to a number of major markets, including Los Angeles (up 12%), Rock Island IL (home of John Deere and other heavy equipment manufacturers, up 11%), Pittsburgh (up 11.5%), Harrisburg (up 21%) and Tampa (up 12%) One major factor: the auto industry had a solid rebound this year, with both production and sales adding materials, chemicals, parts and finished goods to flatbed and specialty freight volume and buoying rates. A seasonal downturn in pipeline construction led to a 14% drop in outbound rates from Dallas. Severe weather also played a role there. Atlanta, Raleigh and Las Vegas also lost strength during the month.
REEFER – Late harvests in Florida boosted outbound rates 10% from Lakeland and 6.0% from Miami, where rates rose a whopping 33% in the month of December, to an average of $2.34 per mile In Miami. In the winter. Grapefruits are rolling out of the Sunshine State, along with a variety of vegetables, headed to population centers along the East Coast. Rates rose less dramatically out of several California markets, where high volume has a disproportionate influence on the national average rate. It’s up 5¢ for December. Initially, I was inclined to blame (or credit) the California Air Resources Board (CARB) regulations for elevated reefer rates, but the pattern of increases in the Golden State is not much different from national trends.That leads me to believe that competition with temperature-controlled intermodal equipment is restraining reefer truck rates in California. Another factor: Infrastructure improvements in Mexico enhanced the alternate routes across that country from the Pacific Coast to the Southwest and South Central regions of the U.S., bypassing California altogether. This trend is likely to continue.