Overview: Dry van spot rates continue to move downward but remain higher than the national average.
- The current domestic intermodal spot rate from Chicago to Chambersburg is $3.82 per mile, including fuel, and remains near its one-year high.
- The dry van spot rate has fallen sharply in the lane from $5 a mile, including fuel, earlier this year to $3.40/mile currently, including fuel.
- The tender rejection rate for inbound Harrisburg van loads is currently 10.5%, 210 basis points (bps) above the current national van tender rejection rate of 8.4%.
What does this mean for you?
Brokers: Continue to lower your bids for capacity in this lane. Keep in mind that while spot rates that other brokers are paying remain higher in the lane than most, they have also fallen further than most others.
Carriers: The lane has the disadvantage of being a “tweener” length of haul, taking about 1.5 days in transit. Harrisburg’s Van Headhaul Index of 33 shows that Harrisburg is still a headhaul market, but that reading is near the low end of its range over the past year, so it may be harder to find a load than is typical in Harrisburg.
Shippers: In light of the falling dry van spot rates and intermodal spot rates that remain at elevated levels, spot shippers should use the highway rather than rail intermodal. While rates have fallen, data shows that Harrisburg is not carriers’ preferred destination. Therefore, keep lead time extended past the 2.8-day average for inbound Harrisburg dry van loads.
Rejection rates and tender volumes both showed continued signs of stabilization; the national OTRI fell nominally from about 8.5% to 8.3%. Essentially, the deterioration of volumes has ceased for the time being. Historically, this is a time of the year when capacity tightens leading into Memorial Day. This may be part of what is creating the stalling of the market, but COVID cases are also making a return (new cases have hit their highest point since early February) and rejection rates should naturally slow their descent as they approach zero.
FreightWaves’ newly released National Trucking Index (NTI), which measures dry van truckload spot rates derived from TRAC contributors, also hit a floor last week, averaging around $2.87 per mile Monday through Thursday. Shippers should watch for increasing disruptions over the next few weeks with some upward pressure returning to the spot market the week before Memorial Day. This will not be a return to where the market was a few short months ago but more of a cessation of improvement for capacity.