Van freight has been “unseasonably strong,” notes DAT’s Ken Harper about recent weeks on DAT Load Boards, but “rates haven’t caught up yet.” The analysis matches what’s been happening on Truckstop.com, too, as reported Wednesday with analysis by FTR’s Jonathan Starks.
As for Harper, “there are two reasons to think van rates may rise.”
1) “There’s strong freight in Southern California, specifically Los Angeles,” Harper says, “as Asian ships bring in the cargo that would have come in earlier on Hanjin’s ships.” It’s important to remember, Harper adds, that with Hanjin’s failure it only docked 2 of 7 big ships intended for the ports of L.A./Long Beach. “This freight is probably holiday-related and will need to move around the country.”
2) “If you look at the load-truck ratio for reefers, you’ll see about that about 60 percent of the country (ag states, turkey states, etc.) is blue to deep blue, indicating a strong imbalance favoring carriers,” Harper says. Not all “reefer” loads require reefer units. In some cases, vans will suffice.
Finally, if the past couple of years are any indication, Harper notes, the continuing shift from retail to e-commerce for holiday shopping means that “coupons/gift cards and discounts will be honored online after December 25. In other words, the traditional Fall freight season used to be late August/early September to November, and then it died.”
The past couple of years have seen the Fall freight season dwindle in intensity, but it’s lasted through December and January due to e-commerce.
“The joke around here is that since Christmas falls on a Sunday this year, good American consumers will discover they didn’t buy the right gift for little Johnny and Mary Jane and immediately go online and buy it with 2-hour delivery,” Harper says, “assuming they’re in a city that offers that kind of speedy service from a large company headquartered in Seattle.” You know who that is.
One lane ripe for a split
Van rates lost traction last week on the lane from Columbus to Atlanta. That’s the “headhaul” direction for that lane judging by the rate averages, but you could try to make up for the decline in revenue by turning the roundtrip into a “TriHaul” three-leg run. Instead of taking a load straight back from Atlanta to Columbus, which showed a paltry $1.28 per mile average last week, you could look for a load from Atlanta to Nashville instead. That lane paid $2.59 per mile last week, and van loads from Nashville to Columbus went for an average of $1.75 per mile. You’ll add just 60 loaded miles to the total trip, and the average roundtrip rate will jump from $1.60 to $2.01 per loaded mile. Examine the details below.