Good news has been hard to come by for motor carriers this month. Truckload volumes remain well below seasonal levels on account of the COVID-19 pandemic, but there was an uptick in dry van shipments last week. That did little to keep spot rates from sliding further, though.
One bright spot: Load posts on the DAT One load board marketplace rose 6 percent last week ahead of news that Texas, Ohio, Georgia, Tennessee and other states were easing lockdown orders.
The number of available trucks on the DAT One network leveled off. There’s still ample equipment available, though, and when you combine that with the shortfall in demand, we get rates that are approaching dangerously low territory for owner-operators and small carriers.
What to watch
States with reduced restrictions: Prices continued to trend down pretty much everywhere last week, but with some businesses reopening in parts of the country, some of those declines could be mitigated this week. That includes Texas, and we’ve already been seeing some signs of markets tightening along the southern border.
Produce volumes: The number of loads moved was higher on 14 of the top 72 reefer lanes last week, with most of those lanes originating in Florida, Texas and Arizona. Produce harvests are starting in California, where strong crop yields could provide a much-needed boost to demand.
Perishable fruits and vegetables will inject additional volume back into the cold chain in the coming weeks. The key for carriers is whether food distributors and retailers are prepared to manage the influx of traffic—and delays at gates and docks.
Dry van trends
Rates rose in a handful of places, but nothing to get excited about. Of the very few increases we saw, they mostly happened on relatively low-volume lanes or lanes that traditionally don’t pay well.
- Denver to Chicago rose 8 cents to an average of just $1.05 per mile
- Seattle to Medford, OR, was up 11 cents to $1.90
A couple of the noteworthy declines:
- Memphis to Indianapolis lost 30 cents at an average of $1.66 per mile. That lane is often associated with retail freight.
- Buffalo to Columbus, OH, fell 20 cents at $1.48
We’re only just now entering produce season, so it’s probably too early to expect much relief there at this point. Activity is picking up in Florida, though, which helped to stabilize outbound rates. Everywhere else, it was still a story of declining rates.
- The biggest drop was from Grand Rapids, MI, to Philadelphia, down 74 cents from a week ago to an average of $2.10 per mile.
- Chicago to Philly was also down big, falling 38 cents to $2.38
- Denver to Houston fell 19 cents to just $1.49.
Load-to-truck ratios have been depressed for some time now for flatbed, and the recent news of oil prices turning negative doesn’t bode well. The oil industry is a major driver of flatbed demand, and with the current glut in crude oil, there’s not much financial incentive to drill.
So far, that hasn’t seemed to impact pricing out of Houston. Flatbed rates out of there stayed fairly stable last week. And as states begin to reopen their economies in phases, manufacturing that’s been put on hold could bring some relief for flatbed carriers.