US truckload rates are sliding after a later-than-usual surge in freight demand hit highways in November.
The average national van rate fell 2 cents to $2.08 per mile, for the week ending Dec. 16, according to DAT Solutions. The average van rate had hit its highest level in three years in the previous week.
US truck tonnage jumped 7.6 percent year over year, but decelerated from a 10.5 percent surge experienced in October, according to the American Trucking Association’s (ATA's) For-Hire Truck Tonnage Index. The ATA also revised its October increase from September to 3.9 percent, up from the previously reported 3.3 percent gain. Year to date, the tonnage index is up 3.5 percent.
“The freight market is really strong,” ATA chief economist Bob Costello said. “The solid truck tonnage figures over the last four months suggest to me that this holiday spending season might be better than many expected, and the best in several years.”
Real consumer spending is forecast to reach 2.8 percent annual growth in the fourth quarter, which would make it the strongest year for holiday retail sales since 2013, according to IHS Markit.
“The strength in tonnage also shows that other parts of the economy are doing well, too, including business investment, factory output, and even construction,” Costello said.
The IHS Markit Manufacturing Purchasing Managers Index reflects that strong economic performance, hitting its strongest upturn since January this month when it rose to 55, up from 53.9 in November. December data pointed to sharper increases in production, new orders, and employment.
Evidence of higher demand for construction can be found in the fact housing starts in November reached their highest level since August 2007, according to IHS Markit. Single-family starts rose 3.3 percent year over year in November and are up 8.7 percent year to date.
Freight demand typically peaks between September and Thanksgiving, and this year’s later-than-usual surge in freight delayed the van rate decline.
Van rates in key regions were as follows: Los Angeles, $2.66 per mile; Chicago, $2.63; Atlanta, $2.22; Philadelphia, $1.97; and Dallas, $1.81.