Freight markets are heating up in the Sun Belt. Even though van and flatbed rates lost 1¢ per mile last week as a national average, the underlying trends were strong. Flatbeds saw rising freight volume and rates in the Southwest and a handful of Southeastern markets. Meanwhile, produce season is underway in parts of California, Florida and Texas, and reefer rates are responding to the seasonal transition.
Van Rates Drop a Penny
The national average rate for vans lost a penny last week, but the underlying trend was mixed. More loads moved last week in the top 90 lanes, and that steady increase in volume will continue to put pressure on rates. We still expect rates to rise in the next couple of weeks.
Regional trends for vans can be divided into two groups: South and North.
- Van rates and volume are heating up in the southern band of states, known as the “Sun Belt.”
- Weather could be a factor, at the beginning of a seasonal transition.
- Rates improved in Dallas, Atlanta, and Memphis, as well as L.A. and Stockton.
- Outbound rates fell in key Northern markets, including Chicago, Denver, and Philadelphia.
Flatbeds Rates Rise in the South
The national flatbed rate averaged $1.83 per mile last week, up 3¢ from the week before.
Flatbed freight is strongest in the Southeast region, but not in the usual locations.
- Atlanta, Memphis and Nashville were fairly quiet last week, and trends out of Roanoke were mixed.
- But flatbed load-to-truck ratios are soaring in Alabama and Arkansas
- Jacksonville is also going strong, with big rate increases on the lanes to Miami up 13¢, and to New Orleans, up 40¢
- Rates are rocketing up in Raleigh, after a down month. Four major lanes out of Raleigh had double-digit increases last week
Other warm-weather markets also got a boost last week, including Los Angeles, where outbound rates rose an average of 5¢, and Phoenix, where a big increase in freight volume led to an 18¢ jolt. The big Texas markets, primarily Houston, but also Dallas and Fort Worth, continue to be stable and reliable sources of flatbed loads.
Reefers Gear Up for Produce Season
Produce season is getting into gear, and top reefer lanes saw a 10% increase in volume last week. Reefer rates are trending up in California, Texas and Florida, which will hopefully lead to more widespread rate increases. This is a transitional period, and some dynamic seasonal trends are unfolding in key regional markets and lanes.
California got off to a slow start, but produce is finally starting to roll out of Ontario, the gateway to the Coachella and Imperial Valleys.
- Outbound rates from Ontario, CA rose 11¢ to $2.11 per mile.
- Rates from Sacramento to Los Angeles rose by double digits, in both directions last week, to a roundtrip average of $2.15 per mile.
- Other L.A. inbound rates fell, including the lane from Twin Falls, ID, down 16¢ to $1.45 per mile.
- The head haul rate from L.A. to Twin Falls rose to $1.92.
Texas produce markets are also heating up, especially along the border with Mexico.
- McAllen, TX has been the top source of reefer load posts on DAT load boards for the past six weeks, because of fruit and vegetables grown in the Rio Grande Valley, on both sides of the border.
- Outbound rates in McAllen rose again last week, including a 21¢ boost on the lane to Dallas, to $2.40 per mile.
Reefer markets are about to rev up in the Southeast, although demand is still subdued in Atlanta, a major hub. Trends are looking a little better in Mississippi and parts of Florida.
- Outbound rates in Central Florida are trending way up. The lane rate from Lakeland to Charlotte rose 17¢ last week.
- Rates slipped another 10¢ out of Miami, despite a big bump in volume on the lanes from Miami to Baltimore and from Miami to Atlanta.
TriHaul for Reefers: Atlanta - Miami - Tifton - Atlanta
The Atlanta-to-Miami corridor has lots of reefer loads available, but the rates on the northbound leg are pretty low. You can do better.
This isn't even a triangular route, in the strictest sense, since you barely stray from the highway on the way from Miami back to Atlanta. Dividing the trip into two shorter hauls will minimize your distance at the low, off-season rates that you're still getting in South Florida at this time of year.
If you can make it work with your schedule, look for a load from Miami to the Florida panhandle or up to Tifton, GA. Then find a second load of produce for that short haul from Tifton back to Atlanta. You add no miles to your route – but you make another $620 on the three-day round trip.
Daily maps, along with detailed information on demand, capacity, rates and TriHaul route suggestions for individual markets and lanes, can be found in the DAT Power load board. Rates are derived from actual rate agreements and contracts, as reported in DAT RateView.
Categories: Rate Trend of the Week