Great Lakes outbound rates volatile, trending higher

 The Great Lakes in December 2017, as seen from a satellite.

The Great Lakes in December 2017, as seen from a satellite.

Data collected from DAT’s RateView shows that moving freight out of the Great Lakes region on a dry van last week cost you a lot. First, we’ll take a bird’s eye view of the regional indexes, then we’ll dive into specific lanes for a more granular analysis. 

Dry van rates over the past seven days from the Great Lakes to New England averaged $3.71 a mile; Great Lakes to Upper Atlantic was at $3.89; Great Lakes to Lower Atlantic was at $3.71; Great Lakes to the Carolinas was $3.11; Great Lakes to the Ohio River was $3.51, and Great Lakes to the Southeast was at $3.02. By the ‘Great Lakes’ region, DAT means Wisconsin and Michigan, as well as northern Illinois, northern Indiana, and northern Ohio.


Let’s begin with one of the major markets for freight in the United States: Chicago. Dry van spot rates from Chicago to Atlanta averaged $3.10 over the past seven days, well above December’s average of $2.88. We also find it significant that with the increase in price came an increase in volatility—during the past seven days, the interquartile range on Chicago to Atlanta rates was 1.85. The interquartile ranges for that lane in December and November were 1.04 and .98, respectively. The wider spread in quoted rates last week suggests that there is less consensus in the market on what the correct rate should be.

Rates quoted from Chicago to Philadelphia were clustered in a smaller distribution, but the trailing seven day average still registers a sharp increase in prices compared to last month. Over the past week it cost an average of $3.94 a mile to move a dry van from Chicago to Philly, with the interquartile range only 56 cents. Still, the $3.94 average is well above December’s average rate of $3.28.

Chicago to Dallas also saw significant movement upward for the first time since the national freight market hit the capacity crunch in September. Chicago to Dallas averaged $2.46 in October, $2.44 in November, and $2.45 in December. For the past week, that lane has been running at $2.65, with an interquartile range of 1.34, nearly twice as wide as the past three months, when it hovered around .70. 


Cleveland has also been running more expensive than usual. It seemed as though prices from Cleveland to Atlanta had plateaued: they shot up from $1.87 to $2.42 in September, rose to $2.55 in October, leveled off at $2.54 in November, and then softened slightly to $2.47 for December’s average. Last week, though, the Cleveland to Atlanta lane has been averaging $2.94 per mile, with 25% of the quoted rates over $3.62. 

Cleveland to Philadelphia is also up over the past week, averaging $4.18, with 25% of rates quoted above $4.65. That’s already 12.6% higher than December’s average rate of $3.71, which was the most expensive month for that lane in all of 2017. Cleveland to Boston averaged $3.86 over the past seven days, an increase of 16.6% over December’s average rate for that lane. 


Detroit outbound rates are not slowing down either. Detroit to Atlanta averaged $2.80 over the past week, up 11.6% over December’s average. Detroit to Philadelphia is sky-high at a seven day trailing average of $3.92, way up from December’s average of $3.33. In a sign that the entire region is experiencing a supply-demand mismatch, even the normally cheap backhaul from Detroit to Chicago is averaging $2.54 per mile, which is what you would have paid for the Chicago to Detroit headhaul last April and May. 

In sum, we’re seeing higher prices and larger price ranges all over the Great Lakes this past week, even in obscure, low-volume lanes. Take Milwaukee to Memphis. That lane has stayed below $2.50 for the past year, except for the hurricane-disrupted month of September, which sent rates spiraling upward all over the country. In September, Milwaukee to Memphis averaged $2.82, much higher than any other time. In the past week, though, that lane has been running at $3.10, an unprecedented price for that route. 

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