Holiday Season Drives Van Demand, Impacting Freight Market

Overall

The freight market experienced a significant shift this week, with van capacity becoming severely constrained and rates skyrocketing. This contrasts with the widespread availability of capacity across all modes during Thanksgiving week.

Spot load posts and spot truck posts both declined noticeably during Thanksgiving week, dropping by 49% and 28%, respectively.

Flatbed

• Load to Truck Ratio decreased by 24% from the prior week, indicating increased available capacity.
• Flatbed spot rates remained unchanged from the prior week but are down 13% from last year at this time.

Van

• Load to Truck Ratio dropped by 20% from the prior week, reflecting increased available capacity.
• Van spot rates increased by 2.5% from the prior week but are still down 14% from last year at this time.

Reefer

• Load to Truck Ratio decreased by 46% from the prior week, suggesting increased available capacity.
• Reefer spot rates remained stable from the prior week but are down 12% from last year at this time.

Fuel

• Fuel prices declined by 2% from the prior week and are down 19% from last year at this time.

What does this mean for business?

The sudden tightening of van capacity and the accompanying surge in rates can have significant implications for businesses that rely on van freight for their operations. Businesses should be prepared for the possibility of facing higher shipping costs and potential disruptions in their supply chains.

Tips for businesses shipping in the current market:

To effectively navigate the current freight market and minimize the impact of the van capacity constraints, businesses can consider the following tips:

1. Prioritize Early Booking: As capacity tightens and rates increase, booking shipments early, especially for van freight, becomes crucial. Securing slots early ensures that your goods are transported on schedule and at a more predictable cost.
2. Explore Alternative Shipping Modes: For non-time-sensitive shipments, consider utilizing alternative shipping modes such as rail or ocean freight. These modes typically offer lower rates and can help reduce overall shipping costs.
3. Negotiate Effectively with Carriers: Engaging in negotiations with carriers can potentially lower shipping costs. Leverage your market knowledge and shipping volume to secure the most favorable rates.
4. Stay Informed and Adapt: Regularly monitor market trends and stay updated on changes in capacity and rates. Be prepared to adapt your shipping strategies as market conditions evolve.
5. Seek Strategic Partnerships: Consider partnering with experienced freight brokers or logistics providers who can optimize your shipping routes, negotiate effectively with carriers, and provide real-time market insights.

By implementing these tips, businesses can effectively manage their freight costs, minimize disruptions, and ensure the smooth flow of goods despite the ongoing challenges in the freight market. Remember, proactive planning, strategic partnerships, and informed decision-making can significantly enhance your shipping efficiency and overall business operations.

If you have any questions about the current freight market or need help shipping freight, please contact us today. We're happy to help you find the best solution for your needs.

Contact Us: https://beemaclogistics.com/contact/

Observations provided by Allan Hutchinson, Director of Strategic Planning, based on the DAT Trendlines. For more information, visit https://www.dat.com/trendlines.