As you can tell from all those dark red areas in the map above, capacity has been tight on the spot market, volumes heavy. Nationally, there are more loads available on DAT load boards than there were before Hurricane Harvey, and recovery efforts after Irma have led to soaring van rates on lanes heading into Florida. The disruptions caused local truck shortages, while diesel prices added to operating costs.
Meanwhile, the storm-related demand for emergency relief came at a time when demand was already high due to a growing economy. The result? Spot rates remain elevated across the country, with a national van average of $1.93 per mile. Higher van rates could be the “new normal” for a while longer, possibly through the end of the year and beyond, as the holiday freight season is about to begin, and the FMCSA’s electronic logging device mandate could add fuel to the fire, set to kick off in mid-December if nothing changes.
Another significant driver of increasingly good conditions for carriers is retailers getting “ready for both the retail and e-tail aspects of the second freight season,” notes DAT’s Ken Harper. “Keep in mind, Halloween is the holiday Americans spend the second greatest amount of money on,” beat only by the Christmas holidays.
Hot markets: There’s been a big increase in van freight moving south from Atlanta and Charlotte in response to Hurricane Irma. Some of that is also the result of pent-up demand from shipments that were delayed by the storm. Van rates on lanes like Atlanta to Lakeland, Fla., which serves the central part of the state, spiked 70 cents up to an average of $3.64 per mile. There’s even less freight leaving Florida than usual, though, so the higher rates help to offset some of the potential deadhead miles on the return trip.
The southward shift in freight movements also led to big increases on lanes like the one from Columbus, Ohio, to Atlanta. In fact, van rates in Chicago and Columbus have risen 15 overall in the past month, since the Midwest hubs have prime locations for rerouted freight from both Harvey and Irma.
Not so hot: The biggest week-over-week declines were in Texas, as the state works its way back to business as usual. Rates are still high compared to pre-Harvey levels, though. For example, the high-traffic lane from Dallas to Houston pays more than it did before the storm hit.
Reefer volumes have held steady nationally, and as with van trends, rates rose on lanes going into and out of Atlanta. Demand also picked up in Northern California. There were smaller increases in volume down in Los Angeles and Ontario, Calif., even though outbound prices slipped in the southern part of the state.
Hot markets: The pattern of rate increases mostly mirrored van trends. The largest jump last week was on the lane from Atlanta to Miami, while Chicago to Atlanta averaged a whopping $3.73 per mile. September also happens to be potato harvest season in Wisconsin, and reefer rates have risen 30 percent out of Green Bay in the past month.
Not so hot: As with vans, some reefer lanes had lower rates, but most of the adjustments were slight. Also consistent with vans, the biggest decline was on the lane from Dallas to Houston, which dropped 43 cents to an average of $3.16 per mile, still a much higher rate than it was before Harvey.