Freight Rates Take Miniscule Decline In October 2022
History repeats itself. In September, the month prior, the rates for all three forms of freight decreased. October also had decreases for the month, but the extent to which all three decreased was lower than it was before. With the holiday season quickly approaching, is this a sign of a turnaround? DAT Freight & Analytics has the numbers!
- Dry van hauling decreased four cents to $2.42. While it is a decline, this is a 33% decrease in the rate of change from September.
- Flatbed also dropped four cents per mile to $2.87, a far cry from the fifteen-cent drop before.
- Reefers mirrored dry van and reefer hauling; they dropped four cents to $2.80, which is a change from the six cents per mile in the prior month.
- The average rate change in September was eight cents. For October, it is obviously four cents, down to $2.70.
Is there any information to gleam from the data? The only conclusion we can arrive to is that demand in delivered goods is dwindling slightly before it ramps up for the holiday season. Usually, the months before and after November and December tend to be slower, where it peaks in time for Christmas.
With inflation running rampant in the current United States economy, it is more than likely that consumers are holding off on purchasing bigger goods that would be hauled by trucks, such as dishwashing machines. This reservation is likely a factor in the reduced demand for goods being delivered to stores. The recent excess in store inventory certainly does not help the situation for freight rates.
Despite rates being down in recent months, they are higher than they were in October 2020, which, while still in the midst of the pandemic, had a surge in pent-up demand due to lockdowns in months prior.
We are still confident that the holiday season will bring a turnaround to freight rates. This will be the first winter without extreme countermeasures provided by governments to mitigate the spread of coronavirus, which should allow Black Friday rushes to be back on. Rates may well be pushing three dollars per mile again very soon.
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