Rates Stay Strong in Mid-August

Rates are unusually strong on the spot market in mid-August, especially for reefers and vans.

Reefers Get a Lift – Looking at the graph below, you can clearly see a repeating pattern of an annual peak in reefer rates in June. What’s different this year is that little upturn at the very end of the blue line: a mini-spike in August.

Not only are rates higher than normal for the season, but there is unusually strong freight volume, as well. Produce harvests don’t seem remarkable in any way, so it looks like other commodities are driving rates. Are you moving temperature-contolled freight? What’s different about this season?

Vans Don’t Peak – Van rates did not hit their typical June peak this year, but they have spiked intermittently. Now they are elevated again. We don’t usually see a back-to-school spike on the spot market. Maybe the new HOS requirement is putting pressure on rates. I didn’t expect HOS to have an effect this soon, but other analysts are predicting a 3% constraint on capacity. Spot market rates tend to be more weighted toward long hauls, and those are the trips that are most susceptible to HOS impacts. What are you seeing in your lanes?

Flatbed Rates Flatten – Flatbed demand and rates remained high through mid-July, and they are slacking off now. There was an element of pent-up demand in the flatbed segment this summer, due to weather-related delays in construction during the Spring. Rates never achieved the heights of 2012, though, due to a combination of tepid demand and increased flatbed capacity compared to last year.

Spot market rates declined in July for all equipment types, as expected, but rates for reefers (blue) and vans (red) rebounded again in mid-August. The upticks are circled on the graph, above. The per-mile rates in the graph are monthly national averages, derived from DAT RateView, and represent only the line haul portion of the rate. Fuel surcharges and any accessorial fees are omitted.

For more information on spot market demand, capacity and rates, see DAT Trendlines.