Spot market update: Seasonal reefer slump continues, van and flat show more strength

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Van freight is staying consistent in terms of volume, in relative terms somewhat strong for this time of year, but an abundance of truck capacity appears to be depressing rates. Shippers and brokers are not having any trouble finding trucks. At once, with the rate slide, the national average is still a few cents above the June average — the typical mid-July slump isn’t as bad for some truckers as it was in previous years.

A downturn in July is a normal seasonal trend on the spot market, but it’s sometimes followed by a rebound in August and September. Things might pick up again soon.

Reefers, on the other hand, are not gonna buck the seasonal trend that is so completely dominated by fruit and vegetable harvests. Reefer freight volumes have moved to the center of the country, where demand is strongest, but rates are down nationally.

Flatbed demand is increasing, meanwhile, and so are rates, but they fell in early July and they haven’t returned to June levels just yet.

Atlanta, Dallas and Houston are the top three markets for load posts on DAT load boards, but outbound van rates are dropping in all three places. When rates fall in so-called “head haul” markets, however, the return rates tend to rise. You don’t have to go into Denver or Seattle to enjoy a rate increase, just be aware of the trends in both directions of any round trip before you choose a load and a destination. As for the lightening demand picture in the map compared to prior weeks: “If the past is the preface to the future,” says DAT’s Ken Harper, “look for the color to come back into the Hot States maps in late August to mid-September.”Atlanta, Dallas and Houston are the top three markets for load posts on DAT load boards, but outbound van rates are dropping in all three places. When rates fall in so-called “head haul” markets, however, the return rates tend to rise. You don’t have to go into Denver or Seattle to enjoy a rate increase, just be aware of the trends in both directions of any round trip before you choose a load and a destination. As for the lightening demand picture in the map compared to prior weeks: “If the past is the preface to the future,” says DAT’s Ken Harper, “look for the color to come back into the Hot States maps in late August to mid-September.” As noted above and reflected in the lightening demand picture in the map, reefer load volumes continued to drop seasonally last week, especially in Southern California. Reefer rates are also lower than they were in June. It’s a typical seasonal decline, but this year’s July slump started later and it’s happening more slowly than in 2015. On the other hand, rates started out lower this year than in the summer of 2015, so they don’t have as far to fall. Good news: outbound rates rose last week for reefers in Chicago, Dallas and Twin Falls, Idaho.As noted above and reflected in the lightening demand picture in the map, reefer load volumes continued to drop seasonally last week, especially in Southern California. Reefer rates are also lower than they were in June. It’s a typical seasonal decline, but this year’s July slump started later and it’s happening more slowly than in 2015. On the other hand, rates started out lower this year than in the summer of 2015, so they don’t have as far to fall. Good news: outbound rates rose last week for reefers in Chicago, Dallas and Twin Falls, Idaho.

Average reefer rates on the lane between Chicago and Atlanta are constantly adjusting. This past week, they averaged about $1.78/mile on the 1,400-mile roundtrip. You can do better. A load of meat or packaged food from Chicago to Atlanta, based on lane averages, might bring about $2.16/mile. Find a load from Atlanta to Memphis, then, at an average $2.77/mile right now. The third leg of your trip back to the Big Windy, from Memphis averaged $2.13/mile last week. Based on those rates, you’ll boost your average rate over the straight return from Atlanta by $1.00/mile, and add almost $1,200 to your total revenue with only 200 more loaded miles. You might also add a day to your trip, so that’s a factor. Two such rounds might round out a good week. Examine the details below.

Trihaul-reefer-7-27-16

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