Today’s Pickup: Spot rates remain near historic highs

Good day,

Van and refrigerated spot rates remain near historic levels, according to the latest data from DAT. The firm said the national average van rate fell 1 cent to $2.06 per mile, but remains just 3 cents below the post-hurricane peak of early October. Reefer rates are back up to a high of $2.37 per mile. For flatbeds, which had been slowly falling in recent weeks, saw a 1 cent increase to $2.30 per mile.

For the month of October, spot volume was 65% higher than October 2016, although it was down 3% from September. Typically, October is a high point for contract freight associated with holiday retail, but the recovery and rebuilding from the hurricanes has added extra pressure in the spot market.

“Early November results, coupled with trends in recent years, indicate that spot freight volume and rates are likely to rise again before the end of December,” according to Mark Montague, senior industry analyst at DAT.

For van trailers, October’s freight availability increased 66% year-over-year, despite an 8% seasonal decline, compared to September. The additional demand boosted the national average spot van rate by 5 cents to $2.02 per mile, including fuel, setting a three-year record that was 37 cents (22%) higher than the average for October 2016.

Refrigerated capacity also increased, climbing 68% year-over-year. The national average reefer rate rose to $2.31 per mile for the month, the highest monthly rate since December 2014. The line haul portion of the rate (sans fuel) was the highest since 2010, when DAT began publishing spot market rates.

Post-hurricane recovery in Florida and Texas helped push up flatbed demand 5% for October over September, and 105% year-over-year. The national average rate was up 5 cents to $2.33 per mile, a 41-cent increase compared to October 2016.

Did you know?

According to a DHL survey of consumers, 27% of online shoppers would rather have a root canal than have their holiday purchases arrive late.

Quotable:

“The number of loads started to go up noticeably in the beginning of the summer. Demand is up. Supply is down. It’s a perfect storm, so the price goes up.”

– Eric Starks, FTR CEO, at the CCJ Solutions Summit

In other news:

Daimler unveils trucks for Mexico as part of global strategy

Daimler’s Freightliner brand has unveiled several new truck models for Mexico that are part of the company’s global truck platform. (Fleet Owner)

NAFTA talks reach round 5

NAFTA negotiators have reconvened for another round of talks over North American trade with several areas of disagreement. (Transport Topics)

Late shipping is not acceptable to consumers

A DHL survey found that consumers have very low tolerance for late deliveries during the holiday season, placing added stress on the supply chain. (Inbound Logistics)

Paying for infrastructure remains a stumbling block

Sen. Shelley Moore Capito (R-W.Va.) says crafting an infrastructure program is the easy part, but paying for it might keep it from being enacted. (The Hill)

10% rate increases?

FTR’s Eric Starks says that rates could rise by 10% or more by next year as more freight is hauled and capacity shrinks. (CCJ)

Final Thoughts

DAT reported huge increases in capacity and volumes in October year-over-year, as well as elevated rates. FTR’s Eric Starks is also suggesting 10% and higher rate hikes are possible next year, giving further indication that 2018 is shaping up to a big year for carriers.  

Hammer down everyone!

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