For the week ending Oct. 4, supply chain interruptions pushed freight to the spot market, raising overall available loads by 5% and allowing the spot van rate national average to reach a record high of $2.46/mile, according to DAT Freight & Analytics.
DAT pointed to available capacity dipping 1.5% as a reason van, refrigerated, and flatbed load-to-truck ratios were higher. This builds on September, which DAT called “unseasonably strong” for national average rates. Spot load posts more than doubled to 116% and truck posts decreased 6.2% year over year (YOY).
Versus last September, each segment experienced a sizable boost:
- Van: $2.38 per mile (up 28.9% YOY);
- Flatbed: $2.41 per mile (up 9.8% YOY);
- Reefer: $2.57 per mile (19.1% YOY)
Here’s a chart of the growth from the start of Q3 2020 through the first week of October.
Drilling down, the national average van spot rates were $0.08 higher than the September average. Los Angeles was up $0.07 from the previous week, hitting $3.37, due to record cargo volumes at ports of Los Angeles and Long Beach. The August total container volume were at record highs at the L.A. port—over 960,000 TEU (20-ft. equivalent units), doubling March levels. On the eastern side of the country, business around the Lehigh Valley was booming, with van rates shooting up $0.19 to $2.92/mile around Allentown, Pa.
Flatbed available loads on the top 78 lanes increased 2.2%, with rates from Cleveland, Ohio, up $0.10 over the previous two weeks, now at $2.70. Outbound load volumes from the Pacific Northwest rose 17% week over week, with nearly one in five loads heading down the coast to Southern California.
Reefer rates are higher than usual, about 20% more than September 2019, though 48 of the 72 top reefer lanes were lower or stagnant, indicating signs of a plateau.
This adds to other positive signs that the economy is improving. Due to the COVID-19 pandemic, real GDP plummeted 31.7% in Q2 2020, though the American Trucking Associations’ (ATA) chief economist, Bob Costello, predicted Q3 would increase 30%, prompting him to say, “The recession is likely over.”
Costello projected GDP to be up 2.5% for Q4 and build on that in Q1f 2021 with a 3.3% increase.
Freight has been somewhat insulated from the overall recession because goods declined only 5% while services (because of safe distancing and nationwide shutdowns) dropped 15%. Goods consumption looks to be steady until at least the end of 2021, according to the ATA.