Even with some sequential spot market rate declines in July, recent data issued Portland, Oregon-based DAT, a subsidiary of Roper Technologies, showed that they remain in line with the strong rate momentum that has been evident in 2018.
The healthy market is reflective of various ongoing factors, including tight capacity, solid economic demand, and a lack of drivers, among others.
The national van spot market rate for the week of July 22-28 was down for the third consecutive week at $2.30 per mile, with DAT noting that the overall July average is barely lower than the record-high rate that was set in June.
DAT said that June’s national average van rate was up 17 cents compared to May at $2.32 per mile (and up 52 cents annually), which stands as the highest rate recorded by DAT for this segment. The load-to-truck ratio for vans is at 6.9 loads per truck.
DAT explained that when looking at national van rates, there are some signs of easing.
“While truckload capacity has been tight all year, and demand is still intense, we’re starting to see a decline in volume on the high traffic lanes,” it said. “On the top 100 van lanes by volume, load counts lost more than 7% last week (July 22-28) compared to the week before. Of those 100 lanes, only 18 had higher rates, while 76 went lower week over week, and 6 were neutral.”
On the refrigerated (reefer) side, DAT said rates were inching down, due to hot temperatures in Southern California ruining high–value crops.
The national reefer rate through July 28 stood at $2.65 per mile, which is 4 cents below June’s average, which also hit an all-time high, making rates still at a high level on a historical basis. The load-to-truck ratio for reefer loads is at 8.3 loads per truck, which is down compared to June’s 13-1 ratio.
The national average flatbed rate for the week ending July 28 fell 1 cent to $2.78, with the load-to-truck ratio at 39 loads per truck.
In a recent interview, DAT analyst Mark Montague said that spot market data on a year-to-date basis represent a working thesis that things are rolling along with no visible end in sight.
“It is really one of the most remarkable freight periods since deregulation in 1980,” said Montague. “The question is where do you find truck drivers and capacity to restore more equilibrium. How do you get back to that?”
Addressing the tight capacity, Montague said it is important to remember that demand peaks before rates peak, with rates tending to stay up, even as things start to cool off at times, depending on sector. Reefer, he said, is an example of that, as there is now less urgency compared to before July 4.
Looking ahead, Montague said that August’s data will be very telling in light of recent trade and tariff developments, adding that it remains to be seen if it will slow down the strong market, as there are a lot of domestic drivers like oil and gas and pipeline construction that are doing very well with many projects underway in the southeastern U.S.