Fuel prices have fallen in recent weeks. If you're a motor carrier, that's great for operating expenses, but it's also taken some of the pressure off of van rates. That, plus the normal winter slowdown, has led to 7 straight weeks of declining spot rates, although prices are still elevated for this time of year.
There are signs that van rates have hit bottom, and they could rebound soon.
- Most declines last week were slight, and pricing has been stable in many markets.
- Volumes rebounded 2% last week on the top 100 van lanes.
- The "phase-in" period for the electronic logging device mandate ends on April 1, which is when trucks will be placed out of service if they don't have an ELD installed. If capacity tightens the way that it did when the mandate started in December, prices could spike again.
- Just when capacity gets tight, demand is expected to surge. The first quarter closes on Saturday, March 31, and shippers will be in a rush to move freight before the weekend. Then the spring freight season starts to rev up in April, and rates typically keep climbing at least until July 4th.
Memphis is right in the middle of a dark red patch on the heat map for truckload demand. Last Friday, the van ratio there topped 10 loads per truck, well above the national average and ahead of the 5.7 ratio in Atlanta and 6.0 in Charlotte.
All rates below include fuel surcharges and are based on real transactions between brokers and carriers.
Rising
- Memphis to Columbus, OH, rose 20¢ to an average of $2.52/mile, likely spurred on by Easter-related retail shipments
- Memphis to Atlanta rates also rose 15¢ to $2.87/mile
- Rates on the Chicago to Buffalo lane continue to be elevated, and they rose another 23¢ last week, to $3.33/mile
- Chicago to Los Angeles is a lane that competes heavily with rail, but those rates also jumped up 21¢ to $1.63/mile
Falling
Most of the major van markets had just slight declines last week. The two exceptions were Buffalo and Seattle, which are relatively lower-volume markets. The lanes with the biggest declines still paid fairly high rates, especially for this time of year.
- Seattle to Spokane came back down 23¢ to $2.90/mile
- Allentown, PA, to Richmond, VA, has been a good escape route from the Northeast for weeks, but the average rate came down 15¢ last week to $2.56/mile
- Chicago to Denver dropped 14¢ to $2.87/mile
Like we were saying earlier, van rates on the lane from Memphis to Columbus were up big last week at $2.52/mile. Prices are usually balanced on that lane pair, meaning that rates in each direction are typically pretty similar. But lately, rates have dropped in the Columbus to Memphis direction, due to higher demand out of Memphis. Last week the southbound run was down to $1.99/mile, but you could improve on that by turning the roundtrip into a TriHaul. This can also help you to make better use of your time and your truck if the roundtrip is going to take longer than two days.
From Columbus, you could add another leg to the trip, heading to Bloomington, IL. Van rates on that lane averaged $3.13/mile last week, and the load-to-truck ratio in Bloomington is a bit more favorable than Columbus for truckers right now. Loads from Bloomington to Memphis paid $2.81/mile last week, which would boost your average rate per loaded mile from $2.26 up to $2.77. The TriHaul adds about 213 miles, not counting deadhead, and if the route makes sense with your hours of service, it could add $1,200 in revenue.
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This article was originally featured on DAT.com.