Dry Van Report: Shippers ask for lower contract rates in exchange for more volume – DAT Freight & Analytics

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The Logistics Managers’ Index , which supplies insights into the logistics business by surveying over 100 professionals, got here in at 59.7 in August, down from July’s studying of 60.7. That is the primary studying under 60.0 since Might 2020 and the third consecutive studying under the all-time common of 65.3. This month’s studying nonetheless represents growth; nevertheless, the index is 16.5 factors down from March and is probably the most important decline seen in 5 months. Alternatively, it’s equal in scale to the fast improve within the index skilled within the COVID restoration.

The transportation capability index is seeing its fifth consecutive month of development at 64.3; nevertheless, the warehousing capability has contracted for the twenty fourth straight month at 42.3. Stock Ranges proceed to develop at a barely diminished fee (-1.3) of 67.6. The index is down considerably from the all-time excessive development fee of 80.2 noticed in February however nonetheless properly above the all-time common of 62.9 for this metric. The stock prices index worth continues its downward pattern at 76.8, a 2.2 lower from July and down 14.2 factors from March’s all-time excessive studying of 91.0.  The Transportation Costs Index registered 48.0 p.c in August 2022. This corresponds to a drop of 1.5% from the July studying and continues to point contraction. Because of this, we’re seeing spot charges approaching ranges near 2018 vs. the sky-high charges of 2021, and this additionally releases pricing strain on contract charges for the shippers.

JOC’s Ari Ashe lately reported some shipper views on contract charges. “Some carriers are proactively coming again and saying, ‘Can I offer you a fee discount.’ In order we’re coming into the height season, saying, ‘Sure we’ve acquired your value. However if you’d like a bigger piece of this pie how about you cut back your fee?’ We’re utilizing that as a possibility.” One other shipper acknowledged, “In late 2020 and 2021, we did something we might to get product moved and we paid enormous premiums for pop-up vans. Three-quarters of that freight was miscellaneous stuff – not contract and never spot. However miscellaneous stuff is all however dried up this 12 months. So now carriers are asking ‘how can we get extra regular contracted quantity?’”

All charges cited under exclude gasoline surcharges except in any other case famous.

Dry van capability was very tight within the Northeast Area final week, the place outbound spot charges jumped by $0.13/mile to a median of $1.92/mile. Springfield, MA, one of many area’s major manufacturing facilities, was the one market to publish greater weekly load posts. Hundreds 600 miles west to Cleveland, OH, had been paying $1.55/mile, up $0.12/mile during the last three months however nonetheless $0.22/mile decrease than the earlier 12 months. Regardless that it’s a small freight market, spot charges spiked in Charleston, WV, final week after linehaul charges elevated by $0.54/mile to a median outbound fee of $2.58/mile. Brief-haul hundreds 362 miles east to Baltimore had been up simply over $0.20/mile final week to a median of $4.22/mile, the best since Might however nonetheless round $0.40/mile decrease than the earlier 12 months.

Linehaul charges out of the Pacific Northwest elevated by $0.03/mile final week to a median of $1.32/mile, whereas within the giant Seattle market, load posts had been up by 3% w/w pushing up spot charges by $0.02/mile to $1.37/mile. Linehaul charges weren’t so good for carriers on the Seattle to Ontario, CA, the long-haul lane the place charges at $0.54/mile are virtually half what they had been in comparison with the earlier 12 months. Charges in the other way have additionally decreased by $1.43/mile because the begin of the 12 months to a median of $2.65/mile final week. Farther south in San Diego, spot charges elevated by $0.09/mile to $2.19/mile the earlier week, regardless that load posts dropped by 34% w/w. In Los Angeles, linehaul charges fell for the third week to $2.11/mile following final week’s $0.04/mile lower and at $1.74/mile are round $1.00/mile decrease than the earlier 12 months on the Los Angeles to Chicago lane.  

A brief work week to mark the tip of summer time holidays and back-to-school noticed volumes down slightly below 7% final week to start out September 33% under final 12 months. Extra carriers predictably took day without work final week in comparison with prior years following a 9% w/w lower in gear posts, that are nonetheless at their greater stage since 2019 for the beginning of September. Fewer load and gear posts resulted within the dry van load-to-truck (LTR) rising barely from 3.57 to three.64 final week.

Dry van linehaul charges have decreased by 32% because the begin to the 12 months following final week’s $0.03/mile lower. The nationwide common dry van linehaul fee ended final week at $1.88/mile, which is $0.60/mile decrease y/y and simply $0.04/mile greater than in 2018. Dry van linehaul charges are nonetheless $0.24/mile greater than the typical of pre-pandemic years at the beginning of September.

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