Fuel prices putting a damper on rates as winter freight season settles in

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DAT-VanRatesMap-2016-Jan10-16

Declining diesel prices further put a damper on rates this past week. At $2.11 per gallon nationally on average, the lowest price since March of 2009 in the midst of the last recession, diesel prices dictated an average fuel surcharge of just 16 cents per mile, according to DAT.

Rates fell, too. While linehaul rates are not exceptionally low, the ultra-low, falling surcharge helped drive spot market van rates down 5 cents a mile to a national all-in average of $1.68 per mile.

Rates fell for hauls originating in Los Angeles, Dallas, Chicago, Atlanta and Philadelphia, but strong freight volume may lead to a rebound on the most popular lanes this week or next. These rates are based on actual rate agreements between freight brokers and carriers.

Spot market truck demand fell, too, taking rates with it — the national load-to-truck ratio was down from 2.7 to 1.7 loads per truck last week, though that level was a more typical result for the slow winter season, DAT says, than the prior weeks. The hot states map for last week still shows a lull on the West and East Coasts, with the greater demand balance shifting to the cold Upper Midwest. This week’s hot individual markets include Missoula, Mont.; Rapid City, S.D.; Eau Claire, Wis.; Rock Island, Ill.; Decatur, Ga.; Erie, Pa.; and Syracuse, N.Y.. Those cities offer solid load volume and high load-to-truck ratios today, but local conditions can change quickly. Be sure to check on outbound load availability before you go in.Spot market truck demand fell, too, taking rates with it — the national load-to-truck ratio was down from 2.7 to 1.7 loads per truck last week, though that level was a more typical result for the slow winter season, DAT says, than the prior weeks. The hot states map for last week still shows a lull on the West and East Coasts, with the greater demand balance shifting to the cold Upper Midwest. This week’s hot individual markets include Missoula, Mont.; Rapid City, S.D.; Eau Claire, Wis.; Rock Island, Ill.; Decatur, Ga.; Erie, Pa.; and Syracuse, N.Y.. Those cities offer solid load volume and high load-to-truck ratios today, but local conditions can change quickly. Be sure to check on outbound load availability before you go in.

That advice applies if you’re headed outbound from Los Angeles, from which owner-operators on average are getting about $2 a mile, to Seattle, where loads for the return are scarce if you can find one at all. Average rates from Seattle to L.A. have been much too low for good profitability of late, but split the return, without adding many miles at all, with shorter hauls to Medford, Ore., then to Stockton, Calif., then another from Stockton to L.A. You’ll have more picks and drops, which can be time-consuming, but you’ll also make better money on your loaded miles. You will add about $650 in revenue, and boost your overall revenue to $1.79 per loaded mile for the roundtrip, which could make for a decent take in a slow season. Examine the details further below.

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