Rates firm and capacity thins, but diesel keeps climbing

Long-distance truckload prices rose 1.9% in August to 207.6 on the Bureau of Labor Statistics producer price index, and less-than-truckload rose 4.5% to 306.8. After a long soft stretch, most of the board is now moving the driver's way.

Two forces sit behind the firming. FreightWaves reported this week that carriers are leaving the market faster than they are joining, and that an early-stage enforcement crackdown on noncompliant drivers is letting even large fleets push rate increases through under modest demand. That is negotiating leverage that did not exist in the spring.

The exception is flatbed. The BLS proxy for specialized freight fell 0.8% in August to 166.2, the one major segment that did not firm. If you haul open-deck, the rebound the box haulers are seeing has not reached you yet -- worth factoring in before you commit to a lane at last month's number.

Refrigerated produce held roughly flat, averaging $4.11 a mile nationally in the week to 8 September, down a quarter of a percent. That national figure is an unweighted mean across whatever lanes ran that week, so read the lane table as the better guide: Delmarva to Baltimore paid $12.50 a mile, the top-paying lane on the board.

The cost side is where the week bit. The national on-highway diesel average rose 6.6% in a single week to $5.967 a gallon, up 58% on the year. That is a retail pump average including tax, and fleets buying on contract pay less, so read it as direction rather than as what you will hand over -- but the direction is up, and it is eating into the rate gains.

Two outside developments are worth knowing. Mexican customs reversed an empty-truck restriction that had stranded roughly 700 tractors at the Eagle Pass to Piedras Negras crossing, per FreightWaves, so cross-border capacity there is moving again. And the Federal Reserve raised its benchmark interest rate a quarter point, its first increase in three years, per Transport Topics -- if you were planning to finance a truck or trailer, borrowing just got marginally more expensive.

One caveat on the freight numbers: the PPI figures are indices, not dollars per mile. They track change from a 2003 base and blend contract with spot business, so they turn later and more gently than the spot market does. Even so, the direction across dry van, LTL and the pump is clear, and flatbed is the only line pointing the other way.