We experienced a spike in rejections post Labor Day in both 2019 and 2020 until the end of the year when rejections peaked in mid-December near 15% and 28% respectively.
While 2021 did see an increase in rejections up around 23% before Labor Day, rejections never made it back to those levels for the remainder of the year.
This year’s Labor Day mimicking a rejection pattern much closer in % and direction to 2019 than anything we’ve seen over the past 4 years.
Despite the intense difference in rejections over the past 4 years, van spot rates according to Truckstop.com’s 7 day rate-per-mile currently remains slightly above 2020 rates and $0.60/mile above 2019 figures where we did experience a notable increase was in the Flatbed sector.
Jumping from a 13% rejection rate to a 19% over a 5-day period. Flatbed rejections seem to be one of the most consistently effected equipment types around the holiday as retailers push building materials to meet consumer demands.
Reefer rejections also got a boost as grocers stocked up for the last big summer gathering of the year.
The 6-day trend line is the highest since the almost identical increase back before the 4th of July push earlier this year.
Reefer rejections typically tend to pick up speed for the remainder of the year until right before Thanksgiving when they tend to dip for a while until right before Christmas.
Fuel prices at the pump came down a hair after recently catching up to the 24% increase in rack costs from August 9th to the 29th.
Since then, rack costs have leveled out around $3.86/gallon.
If rack costs remain flat, I’d anticipate fuel costs to continue to decrease, narrowing the gap once again between the two, putting downward pressure on the retail to wholesale fuel spread, and ultimately removing the mega fleet fuel advantage over smaller competitors.
According to DAT’s contract vs. spot market national average, contractual van rates and spot rates have continually fallen since the beginning of the year on the spot front, and for the past 3 months on the contractual side; Down $0.07/mile on the contracted side and $0.11/mile in the spot market.
Interestingly enough, while spot rates have fallen $0.57/mile since the beginning of the year, contractual rates remain $0.16 above where they were back in January.
The continued downward pressure on the contract side a telling tale that some shippers have already implemented new RFP’s and have regained confidence in their carrier base as compliance has increased 4-fold since the beginning of the year.
This has been your Bridge Logistics Market Update for the week of September 5th, 2022.