Every week, we seem to report that trends are mixed, that truckload freight volume and rates are in a transition, and it’s still true this week. We’re between seasons, as summer peach and plum harvests and back-to-school retail are giving way to fall apples and Halloween. The economy, too, seems endlessly stalled between growing and shrinking.
The overall picture may be stuck in neutral, but we do see regional growth in the spot freight marketplace. The Midwest is gaining traction, which is always a good sign. There is seasonal freight coming out of the Pacific Northwest, too, mostly as a result of late summer produce harvests. At the national level, those positive trends are obscured by weakness in California freight markets, and the ongoing softness in business sectors that are linked to oil and gas production.
Van and Reefer Rates Dipped 1¢ Last Week
Rates edged down 1¢ for vans and reefers last week, but this may be the bottom, at least for van. The key indicator is an increase in load volume, which tells us that pressure is building in the spot market, and rates could start to rebound.
Diesel prices are moving up, too. That drives up the fuel surcharge, which is part of the total rate paid to carriers. Rising fuel costs also have an indirect effect on the linehaul portion of the rate, because higher fuel costs prompt energy companies to invest in additional production, and that eventually generates more freight.
What's Coming the rest of September?
Early fall used to be the busiest season for truckload freight, as imported goods would arrive at the West Coast ports in September or October, to be on retails shelves before the Christmas shopping season. With the increasing popularity of e-commerce, that seasonal peak is muted. The holiday freight movements start later and continue through January.
Recent data from the California ports suggest that the imported freight will be late arriving this year. Once the goods arrive at the ports, the primary destinations are still warehouses and distribution centers, but the next leg is now facilitated, more often than not, by LTL and parcel delivery services rather than truckload carriers. So the origins and destinations are changing, and so does the average length of haul.
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This article was first published on DAT.com.