Vans and Reefers Head South for Rising Rates
Posted on 23 Mar, 2016 By Peggy Dorf
Van Trends: National Average Rate Adds 3¢
HOT MARKETS: Van rates are rising, and conditions are starting to improve in Los Angeles and Philadelphia. Demand is also heating up in Memphis, and outbound rates there are on the rise. Charlotte is also trending up. Rates are rising in Denver, as well.
Los Angeles – Increased activity at the ports gave rates a boost in L.A. Average outbound rates increased 6¢ to $1.89/mile. The lane from L.A. to Chicago was up 18¢, to $1.37/mile, but the return trip back to L.A. lost 13¢ to $1.15. This is not a profitable trip for most truckers, because the railroads are competing for shippers’ business on that route, at lower rates.
Philadelphia – Outbound rates are rising in Philly, on the major lanes from this East Coast hub to Boston, Charlotte, Atlanta and especially Columbus.
Memphis – It is no surprise to see rates and volume picking up in Memphis. This is a seasonal pattern. Memphis is associated with consumer goods, including truckload as well as the LTL and package freight from FedEx and UPS.
Atlanta is also improving, although there are a lot more empty trucks competing for those loads because of all the inbound freight. Average outbound rates were up 2¢ last week. Outbound van rates are trending up in Charlotte, too.
BEST ROUNDTRIPS. Here are some lanes where you can find a van load pretty easily, and the roundtrip rate is higher than the national average of $1.58/mile.
Columbus-Philadelphia-Columbus. The trip from Columbus to Philly pays $2.23/mile, down 2¢ since last week, but the return trip from Philly to Columbus added 8¢, to $1.31/mile. That brought the roundtrip average up 6¢, to $1.77. That’s well above the national average and potentially a profitable rate for most truckers.
Memphis-Atlanta-Memphis. There is more activity on lanes within the Southeast region, and rates picked up 16¢ to $1.96/mile on the lane from Memphis to Atlanta. The return trip is up 7¢, to $1.44, for a roundtrip average of $1.70/mile. It’s a 760-mile roundtrip, so you’ll make about $900 per day for two days.
Reefer Trends: Rates Rise in the Southeast
HOT MARKETS – Florida is heating up, with increased volume and rates out of Lakeland and Miami. This is a positive trend for the Southeast region, and it puts pressure on rates out of Atlanta. Reefer rates rose in Denver. Trends are mixed in California, where there was a big increase in the number of reefer loads moving out of Los Angeles and Fresno last week, but rates were stable or declining.
Miami – Rates are way up on every major lane out of Miami. Finally. Rates rose even more outbound from Lakeland in Central Florida, due mostly to a big increase on the lane from Lakeland to Atlanta, up 19¢, to $1.35/mile. The return trip from Atlanta to Lakeland lost 6¢, to $2.43/mile. The roundtrip is up to $1.89, which is 6¢ above the national average.
Denver – We talked about Denver for vans. Reefer rates in Denver rose last week, too, led by the lanes to Salt Lake City and to Houston.
Los Angeles – L.A. is the biggest freight market in California, and it has the most reefer loads after Atlanta. Last week, there was a big increase in outbound reefer loads from L.A., but rates didn’t change much. In Fresno, up in Central California, load volume increased but rates dropped. In Ontario, and Sacramento, volume and rates declined together.
BEST ROUNDTRIPS. These lanes are very dynamic. Here are some reefer lanes where you can find a load with a roundtrip rate that’s above the national average of $1.83/mile.
Atlanta-Miami-Atlanta. If you’re heading south from Atlanta, take a load to Miami instead of Lakeland. This is the start of the peak season, so run it while it lasts. Rates between Miami and Atlanta rose last week, in both directions, so the roundtrip is up 36¢, to an average of $1.96/mile.
Denver-Houston-Denver with a length of haul of 1,100 miles and an average of $1.64/mile. That’s not great, although it’s 4¢ better than it was two weeks ago. Denver is a challenging market, unless you’re hauling beer. Denver has a lot of breweries, and St. Patrick’s Day was last week, so there might be a connection there. You want to check the rates in both directions before you go up to Denver, to be sure that this was not just a one-week or two-week blip.
Los Angeles-Phoenix-Los Angeles is always solid, and rates were up last week in the westbound lane, boosting the roundtrip average up 11¢, to $2.42/mile. The only downside of this trip is its 372-mile length of haul. You are pulling in only $900 per day for a two-day trip. You might do better with a longer trip, or a TriHaul, to increase your loaded miles. It’s a trade-off.