Rates remained high for vans in October, compared to 2012. The national average rate for vans, the most common trailer type, even outpaced the previous high for October, recorded in 2011. Rates have not declined significantly in the second half of the year to-date, dropping only 1.1% from June to October. A 2.2% decline in the line haul portion of the rate was offset by a 2.1% increase in the fuel surcharge, yielding only a 1¢ change in the total rate per mile.
In 2012, there was a 3.7% drop in the total rate for vans from June to October. An increase in the fuel surcharge exerted even more downward pressure on the line haul portion of the rate. In 2011, on the other hand, fuel prices declined in the third quarter and line haul rates dropped too, so carriers and their load providers noticed the resulting 7¢ (3.7%) drop in the total rate.
Rates seem to be holding up in the first few days of November, and they may even rise slightly as the month progresses. Van rates increased on the spot market in November 2012, due to a combination of a late Christmas freight and recovery efforts following Super Storm Sandy. Rates lifted in November 2011, too, but not in the two prior years.
Spot market rates, measured in DAT RateView, have been much more stable in the second half of 2013 than is typical for the season. We usually see a significant drop in rates immediately after the July 4th holiday, with a slight bump in the middle of Q4.
Some of the pressure on this year's rates can be attributed to the new Hours of Service (HOS) rules introduced on July 1st. At the same time, carriers' costs have continued to climb, and small carriers are negotiating harder and more successfully with freight brokers and 3PLs. Vans are still getting near-peak rates in many markets, and pricing is actually trending up in certain high-volume lanes.
Van rates have been elevated in the second half of 2013, as seen in this three-year history of monthly average spot market rates, with (orange) and without (red) fuel surcharges (yellow.). The total rate for vans on the spot market in October was $1.85 per mile, or $1.36 for line haul plus 48¢ for fuel. The total rate, including fuel, was only 1.1% below June's peak van rate of $1.86. In the two previous years, the drop in rates was larger from June to October.
Carriers can find those high-paying lanes on DAT RateView, or look for profitable TriHaul (triangular) routes to replace low-paying backhauls. For more information on RateView or to see a demo, call DAT at 800.551.8847 or fill out and submit this online form.
Categories: Rate Trend of the Week