The Hurricane Matthew aftermath hasn’t led to a surge in flatbed rates just yet. Flooding may have prevented loads from moving right after the storm, but freight is starting to pick up in the Southeast now that rebuilding is underway.
Below are the top 5 markets for flatbed load posts on DAT TruckersEdge this month:
All rates below include fuel surcharges and are based on real transactions between carriers and brokers.RISING
- Little Rock, AR
- Shreveport, LA
- Portland, OR
- Spokane, WA
- One flatbed lane that did get more active after the storm was from Savannah, GA to Charlotte, which jumped up ▲18¢ to $2.40/mile
- Outbound rates were up in Baltimore and Harrisburg, PA, but volumes were relatively weak in Harrisburg
- A lot of lanes out of Texas have been down, but the one from Fort Worth to New Orleans has climbed ▲26¢ in the past month to an average of $1.90/mile
- Outbound rates in Pittsburgh are up ▲24% for the month
- Rates and volumes were down in both Dallas and Houston
- The lane from Houston to New Orleans dropped down to earth after some recent spikes -- that lane paid an average of $2.24/mile last week
- Volumes on the lane from Atlanta to Raleigh, NC dropped by two-thirds, as flatbed freight couldn’t make it into those flooded areas
By Matt Sullivan
Freight started moving into Florida again last week, due to pent-up demand following Hurricane Matthew. Van load volume and rates rose higher throughout the Southeast, especially on lanes heading into areas in the Carolinas that were affected by flooding and road closures.
Some of the rate increases may have helped to compensate carriers for the out-of-route miles they drove to avoid flooding on Interstate 95. Plus, as load-to-truck ratios declined in the destination markets, many inbound trucks had to deadhead out of storm-affected areas. The potential for deadhead miles can add to pressure on inbound rates.
Atlanta reclaimed the top spot for van load posts last week, with lots of loads leaving there for areas affected by the storm. Rates were up in both Atlanta and Memphis, and prices surged out of Charlotte.
Conditions in North Carolina made trucks harder to find. Load volume doubled on the lane from Charlotte tothe Lakeland, FL market area, boosting that rate by 38¢, to $2.65 per mile. The Lakeland market includes Daytona, where Hurricane Matthew first made landfall. Rates on the lane from Atlanta to Lakeland also jumped up 16¢ to $2.56 per mile. Both of these lane rates started to drift back down this week, indicating that shippers have already moved the overdue freight that was stalled during Hurricane Matthew.
Hurricane Matthew and its aftermath hasn’t led to a surge in flatbed rates, or not yet, anyway. Flooding may have prevented loads from moving last week. Plus, while the first wave of consumer goods has arrived to replenish store shelves after the storm, it may still be too soon for major repairs and construction that require the materials and equipment that move on flatbeds.
One flatbed lane that did get more active after the storm was from Savannah to Charlotte, which jumped up 18¢ to $2.40 per mile. That could be related to the arrival of ships at the Port of Savannah. On the other hand, freight volume dropped by two-thirds on the lane from Atlanta to Raleigh, as flatbed freight couldn’t make it into those flooded areas.
By Peggy Dorf
A new regulation that will force U.S. trucking companies to electronically log employee hours is designed to limit accidents by keeping tired drivers off the road.
It may also drive smaller trucking firms out of business.
A trucking industry survey earlier this year of mostly small operators found that 84 percent lacked electronic logs, according to load-matching firm truckstop.com. Paper logs allow transport companies already facing razor thin margins to fudge the books, boosting their hours on the road to help the bottom line.
But a mandated switch to a digital system by late December 2017, regulators say, will boost safety by preventing exhausted truckers from driving. The Federal Motor Carrier Safety Administration (FMCSA) forecasts the regulation would save 26 lives per year and prevent 562 injuries.
An FMCSA cost-benefit analysis found the new rule would cost truck firms $1.8 billion across the sector to implement, but fewer crashes and less paperwork would save $3 billion.
Industry experts argue that whatever those savings, the smaller firms and independent owner operators that are the backbone of a highly fragmented market will take a productivity hit, making it difficult to pay off their trucks that have doubled in price since 2000.
As a result, small to mid-size trucking outfits will need to find more drivers to haul the same amount of freight — and seek other ways to cut costs — in order to make it.
“Some of the smaller (trucking) companies are just not going to survive” the change to electronic logs, said Dan Clark, head of BMO Transportation Finance, North America’s largest truck and trailer financing company.
The biggest truck firms back the rule and have used electronic logs for years. Large outfits like Schneider National, Swift Transportation Co. and Covenant Transportation Group Inc. all say the new logs reduce truckers’ miles on the road.
Cutting down driver miles means higher spending for additional drivers to haul freight. That leads to higher prices for consumers unless the firms find ways to squeeze more productivity out of their trucks.
According to an FMCSA analysis, the rules will affect nearly 3.4 million drivers. Larger firms with better economies of scale like Werner Enterprises Inc have seen their productivity cut between 3 and 5 percent by electronic logs. Estimates vary up to 15 percent for how much productivity could fall at America’s small trucking outfits.
Industry lobby group the American Trucking Associations (ATA) estimates the sector is short about 50,000 drivers. Electronic logging could leave the industry short 1 million drivers, according to industry tracker FTR Intel.
The pending change has U.S. railroads hoping to take market share from the sector. CSX Corp Chief Executive Michael Ward said “won’t impact the big truck firms because they follow the law today, but it will affect small firms.”
“This will be a positive for us,” Ward said.
Biggest Hit Since DeregulationThough it does not kick in until the end of next year and is being challenged in court by an independent truck driver association for violating driver privacy, executives are already bracing for the new rule’s impact.
“This will be the single biggest thing to hit our industry since deregulation,” in 1980, which reduced government controls on trucking rates and routes, says Chris Lofgren, CEO of Schneider National, whose customers include Walmart Stores Inc and Home Depot Inc.
Schneider, the biggest private U.S. trucking company with annual revenue of around $4 billion, offers flexible schedules for drivers who want weekends at home, or longer routes with more money.
“I get the routes I want so I can eat up the miles,” said Bob Wyatt, 68, a Schneider driver who has 4.9 million safe miles on the road.
Truck makers are racing to make automatic vehicles that are easier and more comfortable to drive to help with driver retention.
Denny Mooney, head of global product development at truck maker Navistar said he has heard from customers that say, “‘if our drivers don’t want to drive your trucks, we won’t buy your trucks.'”
Green Bay-based Schneider is also putting customers under more scrutiny. Last year, Schneider rolled out an app for drivers to rate customers, enabling Schneider to fix problems or drop accounts that consistently chew up driver time.
Rival J.B. Hunt Transport Services Inc. is doing the same, after its own report last year found on a good day time wasted on picking up and dropping off loads can cost a trucker two hours out of a daily limit of 11 hours driving time, or 100 miles on the road. Drivers get paid by the mile and log an average of 7,500 miles per month in 2015.
That focus on getting more efficient is one reason why Troy Clarke, CEO of truck maker Navistar, said he is not convinced electronic logging will lead to truck sale spike. Instead, he said, truckers “will address capacity problems through an increased focus on productivity.”
Schneider is focused on building closer relationships with thousands of smaller carriers through its brokerage business to boost capacity.
The company expects more long-term contracts like one it has executed with Home Depot. Traditionally, pricing power seesaws between customers and truckers depending on the economy. Schneider’s deal with Home Depot keeps rates per mile more steady, and guarantees the home improvement chain access to trucking capacity.
“We believe capacity is going to get tighter and tighter,” said Erin Van Zeeland, vice president of transportation management at Schneider. “We believe the one that has the truck, wins.”
The bankruptcy of the world's 7th largest container carrier, Hanjin Shipping
, has led to shippers re-adjusting inventories in the past couple of weeks in order to avoid stock-outs as we head into the busy retail season. Those previously unplanned shipments have brought about a surge in demand for trucks in Los Angeles
. VAN TRENDS
Last week was also the end of the quarter, which sometimes brings a big increase in loads. But the end of Q3 was relatively quiet, with load posts on DAT up a modest 7%. Spot market rates haven’t changed much in the last month either – there were hot markets and regions, but other areas cooled off, so it all balanced out.
The outbound average in L.A.
mostly held steady last week, but some of the eastbound long haul lanes are paying a lot better. L.A. to Elizabeth
, NJ is a 2,782-mile trip, and it paid $1.70/mile on average for the past week. That’s the highest rate for that lane in more than a year. Columbus
is a hub for retail distribution centers, and lane rates last week for L.A. to Columbus
were also the highest they’ve been in a year, at $1.59/mile
Rates trended down last month in the Northeast
, which is typical for this time of year. Rates fell the most out of Allentown
, PA, and Charlotte
, but Hurricane Matthew could affect rates there this week
. REEFER TRENDS
Reefer rates and volumes ended the month pretty much where they were at the end of August, but more lanes were up than down last week. Outbound rates got an offseason bump in Florida
. Most of the major lanes out of Lakeland and Miami
paid better. Rates may go up again this week, because shippers want to move freight ahead of the storm that's moving up from the Caribbean. Hopefully it won’t cause much damage.Twin Falls, ID,
cooled off after a few weeks of high demand, while heavy rains hurt rates out of Green Bay. The Southeast
also continued to slow down. Aside from tree fruit shipments out of Grand Rapids
, fall harvests weren’t as strong a factor in determining the top 5 markets for reefer load posts last week as it had been in previous weeks: 1. Chicago, 2. Elizabeth, 3. Dallas, 4. Grand Rapids, 5. Los Angeles.