Featured Story


Trucking Trends: Backhaul Tuesday



By Mark Montague, DAT Solutions

On the spot truckload market, the national average van rate typically declines on Tuesdays.

Why?

That's the day many trucks want to return home from trips that started on Sunday or Monday after a 250 to 550-mile intercity haul (a common distance for truckload freight). Everyone knows it, too. So, truckers find themselves looking at "backhaul" rates.

Many truckers object to the idea of head haul and backhaul rates but when you go back and forth between two locations, there's almost always more demand (and money) in one direction versus the other.

If you're a trucker, accepting this reality and understanding the rate dynamic are your keys to success.

Find the Hot Market

When rates are trending up, you have an opportunity to maximize revenue by planning roundtrips in advance. Using your load board, search for a load into a "hot" market or, better still, find loads that go back and forth between two hot markets.

A hot market has a lot more loads available than trucks, which means there's less competition among carriers. The map that accompanies this story shows the hottest states based on the number of available van loads compared to the number of available trucks. A good load board can produce these load-to-truck ratios in current and minute detail.

If you find a roundtrip that works, ask the load providers if they have regular freight on those routes and see if you can negotiate a recurring weekly haul. If you want to keep your truck moving all week, you can develop routes that go from one hot destination to another in a triangular or rectangular route. If you plan well, you may be able to move three or four consecutive loads at head-haul rates.

For brokers, look for lanes where there's a big gap between the current average contract rate and the spot market rate. Identify a shipper that needs your services, preferably on a recurring basis. Then find a carrier (or more than one) that will commit to those hauls. By focusing and bidding on those lanes as often as you can, you'll be able to price your services competitively to the shipper while continuing to offer the carrier an attractive rate.

Variables

Not every Tuesday is a bargain. For instance, weather has disrupted supply chains in many of the most active states for spot van freight recently. Road closures impacted Oklahoma, Kansas, Arkansas, Missouri, Kentucky, and Tennessee during the final week of April when we usually see a spike in demand. As we moved into May, most roads were cleared and pent-up demand pushed rates up.

Some markets just have a lot of truckload freight to move right now. Volumes from Houston, Atlanta, Jacksonville, Savannah, and North Charleston are strong, and freight is more abundant in California after a couple of soft years. We'll see how this plays out in June, but right now it looks like there's money to be made every day of the week if you choose your lanes strategically.

Mark Montague is industry rate analyst for DAT Solutions, which operates the DAT® network of load boards and RateView rate-analysis tool. He has applied his expertise to logistics, rates, and routing for more than 30 years. Mark is based in Portland, Ore. For information, visit www.dat.com.