Freight Activity May Not Keep Spot Rates from Falling

Spot truckload rates tumbled during the week ending Jan. 26 despite increases in van and refrigerated load-to-truck ratios, said DAT Solutions, which operates the DAT network of load boards.

The national average van rate fell below the $2 per mile mark for the first time since September 2017. National average spot reefer and flatbed prices moved lower for the third straight week.

NATIONAL AVERAGE SPOT TRUCKLOAD RATES
Van: $1.97/mile, down 4 centsFlatbed: $2.37/mile, down 1 centReefer: $2.34/mile, down 3 cents
Low fuel prices have contributed to recent spot-rate declines (spot rates include a surcharge for fuel). The national average price of on-highway diesel was $2.96 per gallon last week, unchanged from the previous week.

VAN TRENDS
The number of posted dry vans on DAT load boards fell 8% compared to the previous week while the number of posted loads held steady, a sign that freight volume remains solid.
Indeed, the van load-to-truck ratio increased to 4.0 loads per truck; it hit a 20-month low of 3.7 the previous week.
However, spot van rates continue to weaken especially in the West. The sharpest drop has been from Los Angeles, where the average outbound rate fell 13 cents to $2.12/mile. That’s down 19% over the past four weeks. The average rate from Los Angeles to Chicago was down 19 cents last week to just $1.30/mile.

FLATBED TRENDS
The number of flatbed load posts fell 7% while truck posts were down 5% compared to the previous week. As a result, the national flatbed load-to-truck ratio slipped from 21.7 to 21.2 loads per truck.

REEFER TRENDS
Reefer load posts increased 4% while truck posts fell 8%, which caused the national reefer load-to-truck ratio to move up from 4.9 to 5.6 loads per truck. Average outbound prices softened in many key markets:
Grand Rapids, Mich.: $3.30/mile, down 7 centsChicago: $2.73/mile, down 7 centsAtlanta: $2.55/mile, down 1 centDallas: $2.06/mile, down 4 centsElizabeth, N.J.: $1.99/mile, down 7 cents

What to watch this week: the effect of extreme weather on spot rates. 
Winter storms cause trucking operations to slow, which has the effect of reducing available capacity. The weather also affects shippers and receivers who may have trouble maintaining staffing levels and schedules. Restricted capacity can drive rates up, while slowdowns in business and consumer activity can push rates down. Ultimately, the timing and severity of this current winter storm will determine the impact on rates.

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