Spot van truckload rates out of L.A. spike in wake of Hanjin collapse

Spot-market demand on dry van truckload service from the Los Angeles market spiked during the week ending Sept. 24 as the collapse of container line Hanjin Shipping Co. Ltd. left billions of dollars of cargo stranded around the world and forced U.S.-based cargo owners to seek alternatives to move goods to market, according to DAT Solutions, a leading provider of spot-market load board data.

At Los Angeles, which in DAT's database is the second-busiest U.S. market for shipper and broker loads after Chicago, daily load posts rose to more than 4,000 per day, double the typical amount, according to DAT data. Truck posts in the Los Angeles market, meanwhile, fell to between 600 and 700 a day from the normal 900, DAT said. The firm, which tracks spot-market data nationwide, said that an abundant fall grain harvest has siphoned off available capacity that might have been deployed to meet increased demand stemming from Hanjin's Aug. 31 bankruptcy filing and the ensuing chaos it has wrought on the supply chain.

The supply-demand imbalance means that DAT's load-to-truck ratio, which compares the number of available load postings to available trucks, has risen to abnormally high levels in the Los Angeles market, the company said. For example, the ratio last Friday hit 6.6 for dry vans in Los Angeles. The ratio was 6.5 the week before, according to DAT data. Ratios will typically spike on Fridays due to a higher number of pre-weekend load posts. However, the recent ratios were roughly double their normal levels for the market, according to the data.

Nationwide, spot, or non-contract, rates from Los Angeles rose 2 cents a mile, to $2.01 a mile, during the week ending Sept. 24, DAT said. Spot rates on long-haul traffic from Los Angeles rose more than prices on shorter-haul traffic, according to DAT data.

The collapse of South Korea-based Hanjin, the world's seventh-largest container line, has left thousands of containers carrying approximately $14 billion worth of cargo either stranded on ships worldwide or at docks waiting to be unloaded. Demand for trucking services has increased as U.S. retailers reposition goods already in distribution centers for delivery to markets where delayed cargoes were bound. Demand for air cargo services is also expected to climb as U.S. firms seek expedited replenishment options with the peak pre-holiday shipping season about to move into full swing.

Hanjin accounted for about 8 percent of the vessel capacity on the eastbound trans-Pacific trade. While liners like Danish giant Maersk Line have added capacity to help fill the void, the abrupt withdrawal of so much vessel space has put the entire maritime supply chain under enormous pressure.

Ships in transit from Asia to the U.S. are at risk of being impounded, and their shipments seized by Hanjin's creditors. Meanwhile, Hanjin boxes that ports and terminal operators refuse to unload still are attached to their chassis, which has caused a sudden shortage of the critical equipment because they cannot be redeployed.

Mark Montague, a senior pricing analyst for DAT, told the Council of Supply Chain Management Professionals (CSCMP) annual global conference this week in Orlando that tight market conditions and higher spot truckload rates resulting from the Hanjin collapse could persist through the first quarter of 2017.