STATE OF FREIGHT TODAY

Dry van and refrigerated spot rates surge

Spot rates for van equipment typically rise during the week that includes Independence Day, but this year’s mid-year peak resulted in extraordinarily large increases for both dry van and refrigerated rates. During the week ended July 4 (week 26), broker-posted dry van spot rates in the Truckstop system recorded their second largest increase for any week since at least 2008. The increase in refrigerated spot rates was much larger than typical for the week. Flatbed spot rates ticked up slightly.

The cause of the unusually large increases for dry van and refrigerated rates is unclear. One possibility is the new roadside enforcement policy, effective June 25, of placing drivers out of service for inadequate English skills. Such a large impact so quickly seems unlikely but is plausible given the level of attention the issue has received. In any case, since the policy change coincided with weeks that usually see strong rate gains anyway, it would be premature to peg spot rate strength to the English language proficiency issue. If van spot rates were to continue rising or even just hold steady in the current week, we might begin to consider whether a fundamental change in the market has occurred. Large drops in van spot rates are common for this week, especially for refrigerated.