Back to January 2025 Industry Update
January 2025 Industry Update: Dry Van
Dry van rates rose sharply in December driven by a spike in the load-to-truck ratio.
Spot Rates
Key Points
- The national average dry van spot rate, excluding fuel, increased by $0.09 MoM, or 5.1%, in December to $1.74.
- Compared to the same month in 2023, average dry van spot linehaul rates were 5.5% higher YoY and were 5.5% lower than the LT average.
- Initially reported national average dry van contract linehaul rates rose by 1.7% MoM in December and were up 0.5% YoY.
Load-to-Truck Ratio
Key Points
- The dry van load-to-truck ratio (LTR) surged in December, rising 59.5% from 3.85 in November to 6.14.
- Compared to December 2023, the dry van LTR was up 82.2% YoY and was 40.2% higher than the 5-year average.
Market Conditions
Dry Van Summary
The Institute for Supply Management (ISM) Manufacturing PMI increased 1.9 points to 48.4% from October to November. This indicates the manufacturing sector, while still not reaching expansion territory, is showing improvement. According to Timothy Fiore, chair of the ISM’s manufacturing survey committee, “Of the five subindexes that contribute to Manufacturing PMI, only new orders was in expansion territory, the same number as October.” The new orders index entered expansion for the first time in seven months in November with a reading of 50.4%. Three industries reported growth: food, beverage and tobacco products; computer and electronic products; and electrical equipment, appliances and components.
Despite a 17% decrease in fuel prices over the past year, carrier profitability finally hit above breakeven in November. With an increase in spot rates in the lead-up to Christmas and New Year, small carriers should end Q4 in the black but will be in the red when costs and rates are averaged over the entire year. For small carriers or owner-operators running 100,000 loaded and 15,000 empty miles yearly, the breakeven operating cost was $1.77/mile in November. With dry van spot rates averaging $2.02/mile, gross profit is around $0.01/mile or about $1,000 in annual profit. That is a long drop from the $64,000/year gross profit in 2021, and year-to-date, small carriers are running at a loss of about $2,000/year.