APRIL 23, 2018
National average spot rates jumped up after full enforcement
The trucking sector usually slows down a bit at the end of the first quarter as freight demand drops. Because of low freight demand, trucker rates also take a hit.
A similar situation was expected this year as well, but that wasn’t the case for the week ending April 7, 2018. Contrary to the usual pattern, national average spot rates jumped up in comparison with March averages.
Spot rates soared across the board
We saw unexpected results this year as freight rates soared due to a tight market capacity and the recent implementation of the ELD mandate — a federal regulation which requires non-exempt truckers to use electronic logging devices. Full enforcement of the FMCSA’s ELD rule began on April 1, 2018.
Over the past few months, the trucking industry has been experiencing favorable market conditions for truckers and a tight capacity, which led to higher rates.
- Dry van rates went up to $2.24 per mile, up by 9 cents from March.
- Flatbed rates hit $2.63 per mile, which is a new record according to DAT.
- Reefer rates went up to $2.48 per mile, up by 8 cents from the previous week.
While the steadily increasing flatbed ratio went up only 6% from the previous week, the 101.5 load-to-truck ratio increased to 111, the highest recorded weekly load-to-truck ratio for any equipment type.
Freight volumes haven’t been impressive lately, but the trucking industry saw higher rates in April due to the shortage of trucks and drivers. Last week’s shortage may be attributed to the number of trucks placed out of service for not having a compliant electronic logging device.
Rates from Los Angeles and Stockton, California have been strong, going up 2.6 percent and 2.5 percent respectively. There’s a stronger freight demand from Stockton, as always.
Columbus, Ohio had a 3.1 percent increase while Denver went up 2.5 percent in outbound rates, despite its notoriety as a dead zone. Houston, meanwhile, increased by just 1.8 percent but has acquired a gain of more than 9% over the last month.
Fresno reefer volumes were up by 4.4 percent while Los Angeles reefer rates jumped 3.9 percent. Ontario went up 2.3 percent on average, and reefer volumes out of the Imperial Valley went down again last week.
Although reefer volumes out of Dallas were quite low, its average outbound rate rose 4.9 percent.
The implementation of the FMCSA’s ELD mandate is changing the dynamics of the trucking industry. Fleets which are using the latest ELD technology to its full potential will reap greater benefits.
Rates are soaring up, and trucking companies are using electronic logging devices to streamline operations, reduce administrative burden, minimize costs, and maximize profits so they can keep up.
PTS Logistics Group will continue to provide the most competitive rates for its clients for its local services and will continue to negotiate for the lowest possible rate for your LTL & TL shipping needs.