Truck market tightens ahead of Thanksgiving
- A high demand for refrigerated freight loads led average rates to rise by two cents last week, according to DAT data.
- "The Central Valley of California (carrots, celery, grapes, lettuce), western Michigan (poultry and produce), and southern Idaho (potatoes) were hot markets for reefer freight," DAT said in its weekly data brief. In Twin Falls, Idaho, there were 40 reefer loads on the market for every available truck.
- Reefer rates have been rising since the start of November. In the last week, available reefer loads rose 12% while available trucks rose 4%. Nationally, the load-to-truck ratio for refrigerated freight rose from an average of 7.0 to 7.5.
High demand is not the only reason for rising rates. As van load data shows, a limited supply of trucks is also a factor in increasing spot rates.
DAT reports the van load-to-truck ratio rose 12% from Nov. 11 to 17, the highest weekly increase since June. The rise was due to hot retail freight markets in Los Angeles, Memphis, Tennessee and Buffalo, New York, as well as a decrease in available trucks. In that week, truck posts declined 4%.
FreightWaves reports the contraction of truck supply is a hidden story amid the rising rates before Thanksgiving.
In a weekly analysis of its SONAR data, the company wrote it found national volume has decreased 0.8% since Oct. 25, and outbound tender rejection rates increased 13% in the same time frame. The data points show demand is increasing, but carriers are rejecting loads more often.
FreightWaves explains this could be due to truckers taking time off for Thanksgiving, which is seen as a family holiday and a less appealing time for drivers to work despite high demand and rate surges.
DAT notes fluctuations in the spot market are weaker this year than they have been in past mid-November markets.
"Shippers appear to be making a concerted effort to reduce spot-market exposure by increasing the use of contract carriers, rail intermodal, and overall better planning now that the ELD mandate is firmly in place," DAT said in its weekly analysis.
- DAT Trendlines Capacity tightens ahead of retail season
- FreightWaves Capacity shrinks due to lower supply, not increased volume
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