Van rates rose all across the country last week, following Hurricane Harvey. The national average van rate jumped up 12¢ to $1.90 per mile, and they are continuing to rise this week, as well Outbound prices rose last week in every major van market, while 78 of the top 100 van lanes had higher rates, compared to the pre-Harvey week.
Most of the major van markets actually had fewer outbound loads available, though, and most regular freight heading to Houston was canceled. Outbound volumes from Houston also fell 73%, but the rearrangement of supply chains, the difficulty of shipping in the flooded region, and increased seasonal demand in other parts of the country combined to create pockets of tight capacity that put extra pressure on truckload rates.
Another cost of Hurricane Harvey: many Houston-area refineries were offline, and some remain closed for now. Diesel prices shot up 15¢ due to the resulting disruption in the fuel supply. Diesel costs $2.76 per gallon now as a national average, and it may go higher this week.
The loads that did move out of the Houston market area paid significantly more last week, with outbound rates up 20% on average. Dallas rates also soared, as some freight was diverted to that busy freight hub. Rates rose in Columbus, as well, as population centers in the Northeast are receiving more freight from that direction. Less freight moved northward out of the Southeast last week, as trucks were moving loads west to the South Central states, a region that is ordinarily serviced out of Houston. The Southeast, especially Atlanta, is also the main source of relief supplies — including plywood, ice, and bottled water — headed for Florida in advance of Hurricane Irma.
Stockton, CA, showed the least price movement among major freight markets last week, and outbound volumes there were off by 14%. It isn’t clear how big a role Harvey played in that, as Northern California has also experienced widespread fires and triple-digit temperatures which may be hampering freight movements.
Rates below include fuel surcharges and are averages based on real transactions between brokers and carriers.
Rates on lots of intrastate lanes out of Dallas spiked last week. Not surprisingly, the Dallas to Houston lane rate soared from $2.40 to $4.00 per mile. We’ve never seen anything close to that on this lane, but remember that it’ll be hard to find a load coming back out of Houston, so deadhead is a factor.
- Volume on the lane from Houston to New Orleans was down 80%, but rates on the loads that did move added 89¢ to $3.21 per mile
- Denver to Houston rose 59¢ to $1.63 per mile, the biggest weekly jump ever on an outbound Denver lane
- Out of the Midwest, Columbus to Allentown, PA jumped up 31¢ to $3.12 per mile
- Chicago to Denver rates rose 22¢ to $2.72 per mile
Rates had been rising on shipments in and out of Buffalo in recent weeks, but prices started to decline last week:
- Chicago to Buffalo fell 28¢ to an average of $2.48 per mile
- Buffalo to Charlotte lost 13¢ at $1.75 per mile
The effects of Hurricane Harvey on the refrigerated segment were less dramatic, but there was still disruption in the spot market. Rates continue to rise on many lanes this week for reefers, as well as vans.
Of course, the biggest disruptions were down in Texas, and the big changes largely mirrored van trends. The number of reefer loads moving from Dallas to Houston was way down, but rates jumped up to $4.29 per mile. Denver to Houston reefer rates also rose 63¢ to $2.53 per mile.
Even with reefer load counts tapering off in Michigan, reefer demand is still high in the Midwest, as you can see in the Hot States Map above.
Prices surged on some high-traffic Chicago lanes:
- Chicago to Atlanta soared 51¢ to $3.58 per mile
- In the other direction, Chicago to Minneapolis jumped up 33¢ to $2.60 per mile
- Also in the Midwest: Green Bay to Wilmington, IL (outside Joliet) climbed 69¢ to a whopping $4.47 per mile
Volumes and prices also spiked on the Atlanta to Philadelphia lane, which climbed 28¢ higher on average at $2.39 per mile. Out of California, Fresno to Denver rates hit $2.39, up 30¢ from the week before.
Only 23 of the top 72 reefer lanes had lower rates last week, compared to the week before. The biggest decline was the lane from Grand Rapids to Atlanta, which lost 40¢ at $2.41 per mile, but rates still rose on the lanes to Madison and Cleveland.
Categories: Rate Trend of the Week