Projected March Freight Rates Large if Held
We usually only post about the freight rates when DAT has solidified the numbers, usually a week after the month has passed. We have made exceptions for notable changes in freight rates, and here is another one. While we are only a little bit over halfway through the month, DAT is estimating freight rates to skyrocket compared to February.
The Numbers and Growth
In pictures, here are the previous three month’s freight rates, followed by the current prediction for March.
Images are courtesy of the fine folks over at DAT.
The predicted changes are as follows:
- Dry van shipping predicted to be at $2.70 per mile, the highest on record and a month-over-month increase of 12.5%.
- Flatbeds predicted to be at $2.70 per mile, the highest since June 2018 and a month-over-month increase of 5.4%.
- Reefers predicted to be at $2.95 per mile, the highest on record and a month-over-month increase of almost 13.4%.
There are multiple potential factors that, added up, would explain the sharp increase. According to DAT themselves, fuel prices have increased 3.3%, which partially explains the increase of rate as a matter of the cost of services rendered. There are also other things in the trucking pipeline: the increased demand for reefer shipments due to COVID-19 vaccines has not only increased the average price of reefer shipments, but other forms of freight needed to raise their rates to remain competitive in the market. Finally, at least one industry expert predicts a dearth of new trucks available for purchase, making the demand for shipments increase faster than truck drivers can fulfill them (though used trucks and truck rental services may diminish this effect).
Conclusion
These numbers are still in their preliminary stages, but the size of the increase is a good omen for trucking industry revenues: even if DAT is completely wrong across the board by twenty cents per mile, two of the three forms of freight would still see an increase.
It might be too soon to call the slow season of trucking officially “over”, but the evidence is pointing a giant flashing neon sign in that direction. We will see you in April to see just how true these freight cost estimations really are.
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