Spot market: Good things come to those who wait

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The national average reefer rate moved up only a penny last month from where it sat in February in spite of generally good volume gains on the spot market, notes DAT attendant to this week’s update. At once, there were a lot of big changes on a market-by-market basis last week, which we get into following.

As you’ll see in the map below, Missouri was among three states showing a 12-plus load-to-truck ratio for the week, including also neighboring Arkansas and Oklahoma, but the day this report went to press Oklahoma/Texas-based owner-operator James Woods, having gotten a slow start earlier in the week, was waiting out lackluster rates with his reefer at the Kansas City Flying J. “I’m sittng here in K.C. right now,” he said. “Wednesday, brokers are not in any hurry to move the load.” Thursday, the day Woods was speaking, conditions might be better, but “Friday they’ll ship it out and let up a little on their money.”

Woods was inclined to wait for the day he believed it was best to negotiate, at the end of the week when brokers get desperate and truckers can often get more out of the load, something he suggested more owner-operators needed the financial stability and wherewithal to be able to do. Without help, particularly from brokers who are too aggressive in their search for ever-higher margins, it’s tough, he recognizes.

On those Friday loads that go for reasonable rates to the carrier, Woods said, some brokers will “tell the shipper, ‘There weren’t any trucks in the area'” when, truly, they were simply holding out for a higher margin until the last minute. Whatever the case, “Don’t take the first offer,” Woods said, “and if it doesn’t work out [on the second], wait.” Always remember: “Broker Monday, carrier Friday,” he adds, referencing common wisdom about the day of the week when either party tends to hold greater negotiating leverage. (Read past analysis of day-of-the-week freight cycles via this link.)

Dat Reefer Hot States Map 2017 Mar26 Apr1 2017 04 06 14 46

Hot markets:  California is the origin state of a whopping 87 percent of the country’s strawberries, and those are moving into prime shipping season. Hopefully that’ll finally turn the state darker in the Hot States map above. Cross-border volumes also surged down in Nogales, Ariz. Reefer load counts were up in Miami, but we’re still waiting on things to really get going in Florida.

Rates spiked on the lane from Dallas to Columbus, Ohio, last week. You can use that to your advantage if you’re running from Chicago to Dallas. The straight return from Dallas to Chicago paid an average of just $1.50/mile last week on DAT load boards, but if you put together a triangle from Dallas to Columbus, and then Columbus to Chicago, you can boost your revenue by nearly half.

The triangle adds 464 loaded miles over the 1,800-plus mile roundtrip, and that extra mileage plus a $2.03/mile average gives you about $4,700 based on rate averages last week, instead of $3,300 on 2,300 loaded miles. It would also work to a revenue advantage if you pick up your second load in Cincinnati, giving you a slightly shorter round trip than the route that takes you through Columbus.The triangle adds 464 loaded miles over the 1,800-plus mile roundtrip, and that extra mileage plus a $2.03/mile average gives you about $4,700 based on rate averages last week, instead of $3,300 on 2,300 loaded miles. It would also work to a revenue advantage if you pick up your second load in Cincinnati, giving you a slightly shorter round trip than the route that takes you through Columbus.

Not so hot for reefers: Western Michigan is a major egg producer, and those are shipping in large numbers ahead of Easter. Eggs are usually on the cheaper side, though, so the higher volumes actually dragged outbound reefer rates down in Grand Rapids.

Dat Van Hot States Map 2017 Mar26 Apr1 2017 04 06 14 46

Van overview: The end of the first quarter led a busy Friday last week on DAT load boards for vans, which gave a boost to some markets that had been pretty quiet this spring. Spot market van volumes are a lot stronger than they were around this time a year ago, when the national average rate was 11 cents lower than it was last week. But as in reefer, at $1.63 per mile, the national average was only 1 cent higher than the February average.

Hot markets: Load counts rose in Los Angeles and Stockton, Calif. Chicago and Columbus, Ohio, also saw volumes spike. That’s good for the national picture going forward, especially since L.A. is back in the mix. Charlotte has surged up to No. 1 for van load posts on DAT load boards, and the load-to-truck ratio last week was 9.1. For comparison, the national average was 3.7 van loads per truck.

Not so hot: Even if van rates haven’t gone up much, the overall trend is definitely upward. Of the top 100 van lanes, 62 paid higher rates last week versus 28 that moved lower. The other 10 were neutral. None of the lanes fell more than 8 cents per mile.

Last week’s update:

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