With all the talk this week about government shutdowns and Obamacare exchange start-ups, some unusual developments went unnoticed in the U.S. freight transportation industry.
Monday marked the end of the month and the end of the third quarter, which coincided with the end of the U.S. government' fiscal year. Some corporations also ended their fiscal year on Monday, and we saw a surge of freight on the spot market last week to close the books on a high note.
VANS: Deck the Malls
Rates rose 3.4% in the higher-volume backhaul lanes last week, including a 2.7% bump in rates out of Seattle, yielding an 11% boost for the month. Don't get too excited, though. Outbound vans there are still only getting $1.40 per mile after the increase, including the fuel surcharge. A few major markets also saw an uptick at the end of the quarter, including Philadelphia, where rates rose 1.0% last week and 2.4% for the month, to $1.70, close to the breakeven rate for some small carriers.
Rates rose only 0.5% outbound from Los Angeles last week, but that was based on big rate increases in lanes to Dallas (up 11¢ to $1.70), Chicago (up 4¢ to $1.67) and Atlanta (up 2¢ to $1.74), all major hubs. Word out of California is that a surge of freight is arriving at the Port of L.A. and Long Beach, and logistics companies in the Golden State are seeing a lot of action right now. That bodes well for Christmas retail orders, despite a recent dip in consumer confidence.
REEFERS: Miami Heat
I was surprised by a spike in rates for reefers outbound from Miami, where rates rose 5.4% last week to $1.64 per mile. You hardly ever see that in South Florida at this time of year, although imports from Chile and South Africa enter the U.S. at the port. Grapefruit harvests are starting now, about two weeks later than usual, but they are expected to ship through November. There was a spike on the lane rate from Atlanta to Lakeland in Central Florida, up 9.4% to $3.14, which is somewhat typical for inbound Florida lanes in October. Inbound rates from Elizabeth NJ to Atlanta rose 16% to $2.11, which tells me that it's hard to find northbound freight from Atlanta.
More typical of the season, reefer freight rolled out in force from Green Bay (up 4.3% to $2.29), Minneapolis and Twin Falls ID (up 6.6% to $1.99), spurred by the potato harvest. There has also been an abundant apple crop this year in Michigan, Upstate New York and central Washington State, but capacity appears adequate. Southern California has been slowing for reefer freight, but the third-quarter close added temporary pressure to outbound rates, which rose from Santa Ana (up 2.2% to $2.57) and Ontario (up 4.4% to $2.43), the gateway to California's Inland Empire.
FLATBEDS: Heavy Metal
Just a couple of weeks ago, flatbed rates took a tumble that looked like the end of the season. Those rates rebounded last week, led by Pittsburgh (up 12% to $2.23) Memphis (up 4.5% to $2.92) and Fort Worth (up 5.6%, to $2.10.) That's consistent with increased volume of metal and ores on the rails as well as on the highways. Atlanta is also strong, as a hub for flatbeds as well as van and reefer freight.
What are you seeing in your lanes? Please add your comments below.