Freight rates on the spot market have been on the decline since coming off of the hot July 4 holiday period and, unfortunately for owner-operators, fuel prices have mostly been on the rise during that time.
The most recent week saw more of the same for spot market rates, but there was some relief with fuel’s national average falling by about 9 cents.
According to the weekly market update from Truckstop.com and FTR Transportation Intelligence, the total market broker-posted rate decreased a little more than 5 cents a mile to its lowest level since late April during the week ending Aug. 7. While rates have been falling, they are still more than 40% above the same week a year ago, the firms noted.
Dry van rates, as shown, fell 5.5 cents last week, to $2.69/mile, which is the lowest since early May. Flatbed rates were also down last week, falling by 6.7 cents to $3.42/mile -- the lowest since late April.
Reefer rates bucked the trend with a 2.8-cent increase to $3.33/mile -- typical for comparable weeks in prior years. The increase, however, wasn’t as strong as many prior-year increases during the same week, the firms said.
DAT Freight & Analytics reported a 1-cent decline last week for dry van to $2.95/mile and little movement for flatbed rates at $3.60/mile. Reefer rates in the DAT system increased 2 cents to $3.38/mile.
DAT analyst Dean Croke noted that linehaul rates, figured minus an estimated fuel surcharge, have fallen for five straight weeks. “Since the week of July 5, the national average dry van rate is down 22 cents, the reefer rate is down 19 cents, and the flatbed rate is down 21 cents,” he said.
Load posts are also down during that time, falling 23% during the same period.
Still, judged by a different inflection point on the calendar -- the week prior to Roadcheck in May, when spot rates were on a record run -- trends still look positive for short-term profit potential analysis.
Fuel's down since that time, and rates are up. Consider our bellwether Dallas-to-Chicago 950-mile load (using a conservative two days for the time-under-load estimate) at Roadcheck average reefer rates versus those seen last week. Fuel price declines from exorbitant May highs are saving an average owner roughly 4 cents/mile in variable expense in the calculations here (fixed costs in the comparison are assumed to remain the same, which obviously won't be the case for everyone).
(Game out scenarios with your own costs via Overdrive's Load Profit Analyzer at this link.)
DAT's Dean Croke noted other positives, too, in increased container import activity on the West Coast, which might portend an early peak retail season.
“Strong containerized imports are flowing through West Coast port gateways as shippers seek to get ahead of tariff changes,” he said. “This pull-forward is expected to produce an early peak retail season, followed by a volume ‘air pocket’ in the fourth quarter.”
Diesel down for first time in five weeks
Diesel’s national average during the week ending Aug. 10 fell 9.1 cents to $5.26/gallon -- the first weekly fall since the week ending July 6, according to the Energy Information Administration.
Fuel prices fell in all regions across the country, with the biggest drop observed in the Lower Atlantic, with a 13.4-cent fall.
The nation’s most expensive fuel, again and as always, is in California at $6.62/gal., while the cheapest diesel can be found in the Lower Atlantic at $5.03/gal.
Prices in other regions, according to EIA:
- New England -- $5.51
- Central Atlantic -- $5.54
- Midwest -- $5.18
- Gulf Coast -- $5.04
- Rocky Mountain -- $5.27
- West Coast less California -- $5.53
ProMiles’ diesel averages during the same week fell nine-tenths of a cent to $5.30/gal. nationwide. According to the ProMiles Fuel Surcharge Index, the most expensive diesel can be found in California at $6.83/gal., and the cheapest along the Gulf Coast at $5.04/gal.
[Related: How Trucker of the Year hits 10.5 mpg with combo mods, operations]
