First week of October brings more motor freight rate gains, reports DAT

The ongoing theme of increasing freight rates, specifically on the trucking side, remains fully intact, according to data issued this week by DAT Solutions in its DAT RateView.

The first week of October saw a continuation of recent multi-year highs, DAT reported, with demand for truckload capacity, already at a premium due to economic growth and seasonal freight activity.

Some of the key findings from DAT included:

• during the first week in October the national average van rate rate hit $2.09 per mile on the spot market. The van rate hasn't been that high since late 2014. During the last week of September the van load to truck ratio hit 7.0 loads per truck, the highest ever recorded in DAT Trendlines, which was first published in 2010.
• the flatbed load-to-truck ratio in September saw record flatbed demand, sending the load-to-truck ratio to 50.2 loads per truck—its highest mark in years and the average flatbed rate has rose to $2.33 per mile; and
• the first week in October saw the highest national reefer rate in almost 3 years at $2.37 per mile, with the load-to-truck ratio for the week at 12.4 loads per truck

Last week, DAT reported that its North American Freight Index, which it defines as a measure of conditions on the spot truckload freight market, was up 9% over August, and spot market freight availability saw a 74% annual increase.

As for what is driving this demand, a DAT blog posting pointed to a confluence of factors.

“The past couple months have churned up a perfect storm of supply chain pressure,” DAT said. “Hurricane Harvey hit the Gulf Coast in late August, follow shortly after by Hurricane Irma. Fuel prices rose, and relief and rebuilding efforts lured trucks southward, leaving fewer trucks to handle fall harvests and move manufactured goods from ports.” 

Looking ahead to the coming months, DAT took a look at past years to provide some perspective. Over the past two years, van rates were stable in October and November before heading up in December. And prior to 2013 it sad that December was viewed as a slower freight month, with merchandise needing to be on store shelves in time for Black Friday. But that has since changed as e-commerce has pushed delivery dates straight to the holidays and continuing into January as a result of consumers using gift cards received over the holidays.

What’s more, December also brings the December 18 ELD (electronic logging device) implementation date brings what DAT called a “new pressure point.” And it added that this could lead to some drivers leaving the industry, with others new to the industry experiencing some sort of decline in productivity.

DAT also observed that capacity remains tight, with load-to-truck ratios continuing to reach new highs. This ratio is derived from the number of load posts on DAT load boards versus the number of truck posts, with DAT explaining it serves as a good indicator of supply and demand, as when the ratio rises, rates often follow.