Freight Market Sees Uptick in Southwest
Over the past week, freight going out of Texas has increased dramatically. This is indicative of the spring produce rush, specifically watermelons and cabbage, for this time of year. Southern Texas border cities have also started to see an uptick in volume and rates over the past week. Arizona has also recently been experiencing tight capacity due to produce season. We recommend searching for vented vans as a cost-efficient alternative to reefer trucks for your produce supply chain needs.
However, the high freight volume warrants increased lead times on outbound loads. Tight capacity means increased rates, and—as of this past week—Southwestern U.S. rates have seen an average increase of $0.09 per mile per day. The current lead time threshold recommended for outbound loads from Texas, Arizona and other southwestern U.S. states experiencing this capacity crunch is at least 4 days.
Texas to the Midwest U.S. are more notable tight capacity lanes due to the low volumes shipping from the Midwest. Meaning carriers will have to deadhead to their next pick-up if they don’t have a load booked near their arrival point. Furthermore, due to this scenario, rates will trend slightly upward in those regions to account for deadhead costs.
Other notable points in the freight market for this past week include the following:
- Northeast U.S. volumes to Canada are down as well as rates. Thus making it somewhat difficult to deliver loads to this region currently.
- Rates for outbound Georgia lanes, specifically dry van, are up due to high produce volumes. This also means that rates for lanes going into Georgia are down thus making it easier to send shipments there.
- New Jersey reefer rates are down currently indicating lower volume and loose capacity.
- Flatbed rates going out of Houston, Texas are currently up indicating tighter flatbed capacity and higher flatbed freight volumes.
Year-Over-Year Decline in Freight Market
In general, the first 4 months of 2019 have seen on average 16.9% less loads than the first 4 months of 2018 according to the Cass Freight Index. VP and senior analyst of ACT Research, Tim Denoyer, reported that the freight market slow-down started in the second half of 2018. Furthermore, DAT data shows April year-over-year spot market metrics for dry van loads are down 58.9%, flatbed loads are down 16% and reefer loads are down 60.9%.
BM2 Freight Services, Inc.
Phone: (859) 308-5100