Van Rates Drop Late in July

Van rates finally began to drop last week on the spot market. I say “finally” because rates rose at the beginning of July and remained unusually strong for the first half of the month, which is not the typical pattern. While national average rates began their downward trend early in the month, they did not drop below the $1.88 per mile — the average rate for June — until July 20, when a handful of markets retained their pricing strength.

Last week, however, rates dropped across the board.

I’m a bit disappointed, because I had thought rates would continue to hold up, or we would at least see a few “hot spots” where outbound rates remained strong in a large port or freight hub. Instead, every major market lost momentum in the week of July 21 – 27.

Freight is still plentiful, and demand for trucks remains solid going into the back-to-school season. It appears that capacity is more readily available in most parts of the country, however, relieving some of the pressure from late June and early July.

In retrospect, it seems that rates were a little slower to rise this year, but they achieved a higher peak. The period of “super-peak” rates did not begin until mid-June, and it lasted through mid-July. One result of this “mesa” — a peak with a flat top — is that national average rates for June and July are now the same, at $1.38 per mile for the line haul, plus 48¢ for fuel, for a total rate of $1.86. That’s higher than the average rate for July 2012, and not far below last year’s peak rate in June.

These comparisons are derived from several years of weekly measurements and analyses of van rates in 80 lanes, outbound from 14 major markets all over the country. Additional details can be found on DAT Trendlines, based on spot market and contract rates databases from DAT RateView.

What are you seeing in your lanes?