Freight Futures daily curve: 9/11

Freight Futures lane to watch today: October LAX to DAL contract

Trucking Freight Futures have followed a consistent pattern over the past two weeks. The spot National (FUT.VNU201909), West regional (FUT.VWU201909) and South regional (FUT.VSU201909) contracts are all settling virtually unchanged, while the East regional contract (FUT.VEU201909) has been volatile because of Hurricane Dorian and the flow of freight to east coast ports due to the ongoing trade war with China. The spot month National contract settled virtually unchanged at $1.47 per mile.

The CHI to ATL lane continued to show weakness, with the September contract (FUT.VCA201909) priced at $2.16, $0.05 lower than yesterday’s settlement of $2.21. Freight out of LAX was also softer today, a byproduct of trade flows going toward East Coast ports. The October LAX to SEA contract (FUT.VLS201910), which has 5,000 miles of open interest, was being offered today at around $2.02 per mile. This is $0.10 lower than the hedge execution price of $2.102. The same is true with the October LAX to DAL contract (FUT.VLD201910), with 25,000 miles of open interest. The hedge was executed at $1.90 per mile and the contract was being offered at around $1.79 today. The goal of a hedge is always to lock in the execution price to achieve corporate financial and operational objectives, regardless of daily rate fluctuations.

SONAR Tickers: FUT.VLD201910, FUT.VLS201910