Truckload rates were under pressure last week, and they soared way up. Van and reefer rates rose 7¢ per mile and flatbeds added 10¢,as a national average, reflected in DAT RateView. That's a big leap for one week, and it left us wondering whether rates are ever going back to what used to be called "normal" levels.
The trend was a bit puzzling, because rates tend to drop like a rock from June to July. Instead, they rose like a rocket. What was that all about? A few factors contributed to the unusual spike:
- End of quarter. The second fiscal quarter closed last Monday, and some shippers just needed to load the freight on a truck in order for it to be credited toward their quarterly revenue. In Q2, there was extra pressure on many companies to catch up, because their Q1 results were lackluster or worse. When shippers are that motivated, they are often willing to pay more for additional capacity or expedited service.
- Friday holiday. It was a short work week, which added to the time pressure. Capacity was constrained, too, as many carriers and drivers were happy to park their trucks for the three-day weekend.
- Perishable inventory. It's not all about berries, although those really do need to be on the store shelves before July 4th. Reefer rates spiked in Florida, where melons and tomatoes rounded out a prolonged harvest season. A whole range of holiday-themed food and merchandise must also be on the shelves before July 3rd, because nobody is going to pay extra for red-white-and-blue cupcakes on the 5th.
- Potential port strike. The dockworkers' contract was set to expire on June 30th for 29 West Coast ports. The negotiations are still underway, and the union has not called for a strike yet, but there was tension in the air last week. Shippers who accelerated their import schedules wanted to move seasonal items off the ships and away from the ports. By "seasonal items," I don't mean just July 4th, but back-to-school, Halloween and maybe even Christmas merchandise, as well.
Even if you don't know all the reasons behind a big change in truckload rates, you can watch them unfold in DAT RateView. Today's rates and historical capacity and rate data combine to give you a lane-by-lane view that enables you to anticipate changes before they happen, so you won't leave money on the table.
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