Weather Has Changed, Rates Have Not

I can summarize this week’s dominant theme in six words: “weather has changed, rates have not.” The snow is finally gone, but van and reefer rates nationwide remain atypically high for early spring. Meanwhile, flatbed rates are rising.

National Average Rates – In the first week of April, van rates remained at $2.10 per mile, including fuel, which was also the monthly average for March. Reefer rates nationally are holding at $2.26, also the same as in March. Meanwhile, flatbed rates have climbed to $2.39 per mile, nine cents above the March average in that segment. (These are national average rates on the spot market, defined as the rates per mile that are paid by 3PLs and brokers to the truckload carrier, as recorded in DAT RateView.)

Van Markets – National averages are very highly aggregated, and individual market trends reveal significant changes. Van demand remains strong in the Green Bay market, and capacity is not sufficient. The imbalance yielded a load-to-truck ratio of 9.4, as of last Friday. The much larger Chicago market, while active, has moved into relative balance for equipment, with a load-to-truck ratio of 1.1. That ratio does not typically lead to rate increases. Soft spots for van have also emerged in the Northeast and in the West.

Reefer Markets – Demand has strengthened in key reefer markets like Tucson and McAllen (TX), both with load-to-truck ratios of 35 for temperature-controlled trailers, likely due to high volumes of Mexican produce for the Easter holiday. As with van trends, demand for reefers has gone slack in certain key markets have gone slack, including Detroit, parts of Pennsylvania, and Hartford, CT, a distribution point for New England.

Flatbed Markets – Demand is high everywhere for flatbeds, except perhaps western North Dakota, where a surplus of inbound flatbeds has suppressed the load-to-truck ratio. It’s down to 1.7, the lowest nationwide for this segment.

The overall picture continues to be one of robust demand on the one side, and constrained capacity on the other. Van and reefer rates appear to have stabilized for now, and trucks are readily available in some major markets. That’s good news for shippers, 3PLs and brokers. Carriers will note that rates, for the most part, stabilized at more profitable levels, and freight volume remains strong overall, albeit with some soft markets and regions.

DAT offers a range of tools to help transportation and logistics professionals, so you can identify regions or market segments that offer the greatest opportunities for your business. Carriers may choose to position equipment in geographic areas where trucks are urgently needed, and 3PLs can help shippers to create balanced routes or flexible scheduling so they can, in turn, help carriers to optimize their available capacity.