Today’s Pickup: Rates are at records, but is the rise over?

(Photo: Shutterstock)

(Photo: Shutterstock)

Good day,

Have the good days of high rates ended? While not declaring an end to rising van spot rates, a blog post yesterday by DAT Solutions’ Matt Sullivan did note some indications that the rapid rise may be slowing.

The national van spot rate reached $2.30 per mile for the week ending Jan. 6, setting a new record high. Sullivan pointed out that the majority of the top 100 lanes saw rates rise last week. But, he wrote, outbound rates from Los Angeles and Dallas dropped and the capacity crunch, made worse by the ELD mandate going into effect on Dec. 18, that has led to rising rates is softening in some areas, notably California, Nevada and Florida.

“There were more lanes with significant declines than what we've been seeing in recent weeks,” Sullivan wrote. “As we move closer to what is typically the slow season, this may prove to be the peak for rates – unless we get more winter storms like the ones last week.”

There are still bright spots, he said, with Houston outbound rates rising 6%. The snowstorm along the East Coast last week significantly impacted rates in some markets, with the Buffalo to Allentown, PA, lane rising 41 cents to $4.22 per mile. Chicago to Minneapolis climbed 39 cents to $3.06 per mile and even warmer locales, such as Houston to New Orleans, saw an 18-cent increase to $2.92 per mile.

Among the lanes falling were Seattle to Eugene, OR, which dropped 95 cents to $2.69 per mile and Dallas to Denver, off 22 cents to $2.58 per mile.

Did you know?

President Donald Trump this week signed two bills designed to curb human trafficking into law. One denotes a USDOT official to coordinate efforts across the agency and the other would deny anyone convicted of a felony for using a CMV for trafficking from obtaining a CDL.

Quotable:

“Technology is the next frontier. We are on the cusp of revolutionary changes in the way we move both people and freight, and I am excited for what the future holds. That’s why I am looking forward to the several projects we are working on that are related to driver-assisted technologies. I expect the work on these projects to move forward this year and in 2019.”

- Cathy Gautreaux, FMCSA Deputy Administrator

In other news:

Trump infrastructure plan again on hold

Once promised within the first 100 days of taking office, the long-awaited Trump infrastructure plan will likely now not be released until at least February, the White House said. (The Hill)

Air freight takes large jump in November

Air cargo rose 8.8% year over year in November and is up 9.7% on the year over 2016 with analysts now predicting a banner year in 2018. (Air Cargo News)

Innovation among FMCSA priorities for 2018

The FMCSA Deputy Administrator laid out the agencies priorities for 2018 with a focus on safety, infrastructure and encouraging innovation. (Heavy Duty Trucking)

Business, logistics firms join together in effort to solve local delivery

Researches, businesses, logistics firms and cities are banding together in an attempt to find sustainable and cost-effective solutions for what they are calling “final 50 feet” delivery. (Transport Topics)

Are supply chains set up for mergers?

As global economies continue to rise, the pace of merger and acquisition activity is expected to pick up, but for supply chains, mergers can be disruptive. (Logistics Viewpoint)

Final Thoughts

DAT has seen some easing of capacity in some areas, which dovetails with a Morgan Stanley report late in December suggesting the same thing. Certainly, the ELD mandate has caused shipping delays and many in the industry are still adjusting, but there are now a few indications that adjustments are being made and a more normal period of freight flows will result.

Hammer down everyone!

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