The ATA just released its seasonally adjusted For-Hire Trucking Tonnage Index for September, and the index posted its largest year-over-year gain since December 2011. While ATA Chief Economist Bob Costello is encouraged by the numbers, he also noted that “the government shutdown served as headwind in the fourth quarter.” Costello also reduced the ATA’s 4Q GDP estimate from 2% to 1.5% and said in his Weekly Economic Recap that the resolution to the shutdown only leaves economic uncertainty and reduces risk taking in the private sector.
So far we haven’t seen much of an impact from the government shutdown, aside from a potential slowdown in flatbed loads related to military activity, so it will be interesting to see how the rest of October plays out as we enter another period of economic uncertainty.
Van Rates Continue to Outpace September, Will it Last?
Much like last week, we saw a dip in the national average for van rates, down 3¢ overall, but that doesn’t tell the whole story. The line haul rate is down to $1.38, which is still outpacing September rates by 2¢ and is 12¢ higher than October 2012. And, the average rate for the major outbound markets that we follow held steady last week as well.
The question now as we enter the final phase of October is how rates will close out the month. While the results have been encouraging so far, looking at where load-to-truck ratios have been headed the last two weeks (down 23.3% since the beginning of October), one has to wonder how van rates will fair going forward.
4 Shades of Orange: Van load-to-truck ratios were down around much of the country last week, which could signal a slow end to the month.
Volume in Major Reefer Lanes Down
Reefer rates are in a bit of a post-harvest / pre-Thanksgiving lull around much of the country. An analysis of region-to-region reefer spot rates showed that about 59% of regional outbound lanes had decreased last week. The Upper Midwest, Great Lakes, Pacific Northwest and California all seem to be losing some momentum. Nationally, loads were up 1.3% last week, but the national average rate went the opposite direction, down 4¢. However, on the major lanes that we track, volume was down 9.7% last week – but rates held steady compared to the prior week in those lanes as well.
Flatbed Rates Recover, Still Down Year-Over-Year
After taking a 13¢ dive last week, the national average rate for flatbeds regained 2¢. This is the only equipment type that isn’t outperforming rates year-over-year – the line haul rate is down 9¢ compared to October 2012. However, the line haul rate is only down 2¢ compared with September.
Costello said he attributes the attributes much of the Trucking Tonnage Index increase to heavy haul loads like construction, auto production and energy output. However, we’re entering a period where flatbed rates typically turn down as winter weather impacts industries like construction, so we will see if that trend prevails as we inch closer to winter.
Categories: Rate Trend of the Week