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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Nov 20 – 26 vs.
Nov 13 – 19
Oct 2016 vs.
Sep 2016
Oct 2016 vs.
Oct 2015
Spot Market Loads 30% +2.8% +52%
Spot Market Capacity 28% +3.4% 4.2%
Van Load-To-Truck +2.3% 6.0% +86%
Van Rates (Spot) 0.6% +2.5% 2.9%
Flatbed Load-To-Truck +1.0% +13% +47%
Flatbed Rates (Spot) 1.0% +1.6% 4.5%
Reefer Load-To-Truck 8.9% 0.8% +54%
Reefer Rates (Spot) +0.5% 0.5% 2.1%
Fuel Prices +0.0% +2.5% 2.6%
Van and Flatbed Ratios Rise During Holiday Week

Rates Edge Down

Nov 20 – 26 – Last week began with a flurry of load board activity, but it slowed by Wednesday afternoon for the long Thanksgiving weekend. Rates rose on the high-traffic lanes, but some backhaul lanes lost traction, so adjustments to the national averages were small. Van rates dipped 1¢, reefer rates added 1¢, and flatbed rates fell 2¢, compared to the previous week.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.

Last update: 11/29/2016 – Next update: 12/6/2016

Fuel Prices
+0.0%$2.42 / gallon
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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Nov 13 – 19 vs.
Nov 6 – 12
Oct 2016 vs.
Sep 2016
Oct 2016 vs.
Oct 2015
Spot Market Loads +5.3% +2.8% +52%
Spot Market Capacity +2.1% +3.4% 4.2%
Van Load-To-Truck +3.9% 6.0% +86%
Van Rates (Spot) +0.0% +2.5% 2.9%
Flatbed Load-To-Truck +3.8% +13% +47%
Flatbed Rates (Spot) +1.1% +1.6% 4.5%
Reefer Load-To-Truck +2.6% 0.8% +54%
Reefer Rates (Spot) 0.5% 0.5% 2.1%
Fuel Prices 0.8% +2.5% 2.6%
Demand Increases for Vans, Reefers, Flats

Flatbed Rates Rise 2¢

Nov 13 – 19 – Load-to-truck ratios rose for all equipment types last week, on stronger seasonal demand. Load volume was exceptionally high for vans, but the average van rate was unchanged. Flatbed rates rose 2¢ as a national average, while reefer rates dipped 1¢ per mile.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.

Last update: 11/22/2016 – Next update: 11/29/2016

Fuel Prices
-0.8%$2.42 / gallon
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Comparing the outbound rates from 15 regions to each of the same 15 regions as destinations, gives you 225 (15 x 15) origin-destination pairs. In the first week of November, 64 of those region-to-region pairs had a rate increase of at least 6¢ per mile, and the biggest increases were on lanes that originated in the West, heading to destinations along the East Coast.

Here are the four region-to-region pairs with the biggest rate increases, comparing last week to the third quarter averages: 

1. California to New England – up 18¢ per mile

2. Upper Mountain States to Florida and Southern Georgia – up 17¢ per mile

3. Pacific Northwest to Florida and Southern Georgia – up 16¢ per mile

4. Lower Mountain States to Lower Atlantic States – up 16¢ per mile

 

Rates have been climbing on many west-to-east lanes throughout the fall season. In nearly every case, rates are up by 6¢ per mile or more. On a region-to-region basis, the biggest rate jumps, of 16¢ to 18¢ per mile, are depicted on the map, above. From top left: (1) Upper Mountain to Florida-South Georgia; (2) Pacific Northwest to Florida-South Georgia; (3) California to New England; and, (4) Lower Mountain to Lower Atlantic.

 

The graph shows 24 region-to-region pairs, with changes in rates for freight movements that originated in four Western regions, labeled by color: Upper Mountain, Lower Mountain, California, and Pacific Northwest. The destinations are in six East Coast regions, listed on the X axis: New England, Upper Atlantic, Lower Atlantic, Carolinas, Florida-South Georgia, and Southeast. Of the 24 region-to-region pairs, only three had declining rates during the first week of November: (1) Lower Mountain to New England; (2) Pacific Northwest to New England; and (3) Upper Mountain to Lower Atlantic.

 

These results are atypical, so they may surprise longtime freight trend watchers. In recent years, fall freight has peaked in September and October. But in 2016, those patterns don’t seem to apply. For example, there is usually a peak for van freight in June on the spot market, followed by declining activity after the Fourth of July. That peak was muted this year, but so was the decline. Now we are starting November with no sign of a seasonal decline in activity. Instead, the freight economy appears to be heating up, at least on the spot market.

There is a clear trend of west-to-east movement, with increased activity in California, the Pacific Northwest and Mountain regions adding to rate pressure in other U.S. regions. Rates are also rising on seasonal traffic from Canada to the U.S., but rates are falling on lanes entering Canada from all over the U.S., except the Lower Mountain region.

If you are moving freight in the eastern half of the U.S., you may not be seeing much rate movement. In some regions, including the Great Lakes and Upper Midwest, rates were actually down 6¢ per mile or more last week. The strength of those west-to-east lanes has led the overall rate trend, however, and that trajectory has been up solidly for the past several months. 

Measured at the national level for trips over 250 miles, spot market van rates are up 8¢ per mile in November, compared to the October average. Rates are up 23¢ per mile since the low point in April, including a 6¢ increase in the fuel surcharge.  

We have seen this trend building for a while in the DAT RateView and load board data, and we identified a few factors that are contributing to higher rates:

1. Strong produce harvests, with declines in California being offset by strong numbers elsewhere.  

2. Hanjin bankruptcy, resulting in supply chain disruption and increased amounts of inventory transfers, to prevent stock-outs.  

3. Weather events, including flooding in Louisiana and the Carolinas, which generate demand for emergency relief, followed by construction supplies and equipment.  

4. Some economic improvement, as indicated in recent ISM and other reports. 

Refrigerated freight is showing renewed strength, as strong harvests give way to a pre-Thanksgiving surge. The national average rate rose to $1.97 per mile for reefers last week, the highest since early July. Strong potato harvests in southern Idaho, as well as apples from Washington and Michigan, add to a respectable volume of iceberg lettuce from the San Joaquin Valley and the Imperial Valley near Yuma, AZ.  California continues to produce strawberries from Santa Maria to Watsonville, as well as a good crop of grapes. Add poultry, dairy products, and refrigerated packaged foods to the mix for Thanksgiving, and demand for reefers should keep

Flatbed freight also shows signs of stability, after a prolonged decline. 

The regional views tell us that freight is remarkably strong for this time of year. While the geographic trends may shift in the next four to six weeks, it is reasonable to expect a continuation of the atypically high volume and rates on the spot freight market through the end of the year. 

Track changes in spot market freight rates with DAT RateView, which offers real-time spot market and current contract rates, based on more than $28 billion in actual transactions. 

Trucking Success partners with DAT to offer a special on the TruckersEdge load board. Sign up for TruckersEdge today and get your first 30 days free by signing up at http://www.truckersedge.net/promo123 or entering “promo123” during sign up.

 

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Nov 6 – 12 vs.
Oct 30 – Nov 5
Oct 2016 vs.
Sep 2016
Oct 2016 vs.
Oct 2015
Spot Market Loads 1.2% +2.8% +52%
Spot Market Capacity +3.2% +3.4% 4.2%
Van Load-To-Truck 7.2% 6.0% +86%
Van Rates (Spot) 1.8% +2.5% 2.9%
Flatbed Load-To-Truck +0.1% +13% +47%
Flatbed Rates (Spot) 1.0% +1.6% 4.5%
Reefer Load-To-Truck 4.7% 0.8% +54%
Reefer Rates (Spot) 1.0% 0.5% 2.1%
Fuel Prices 1.2% +2.5% 2.6%
Rates Remain Strong for Vans in Mid-November

Rates Decline From Late-Season Peak

Nov 6 – 12 – Rates were down for vansreefers, and flatbeds last week, after a big boost in the first few days of the month. Compared to the previous week, average rates fell 3¢ per mile for vans, 2¢ for reefers and 2¢ for flatbeds. Rates for vans and reefers remain very strong for this time of year, however.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.

Last update: 11/15/2016 – Next update: 11/22/2016

Fuel Prices
-1.2%$2.44 / gallon
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Year-End Tax Planning for Businesses

There are a number of end of year tax planning strategies that businesses can use to reduce their tax burden for 2016. Here are a few of them:

Deferring Income

Businesses using the cash method of accounting can defer income into 2017 by delaying end-of-year invoices so payment is not received until 2017. Businesses using the accrual method can defer income by postponing delivery of goods or services until January 2017.

Purchase New Business Equipment

Section 179 Expensing. Business should take advantage of Section 179 expensing this year for a couple of reasons. First, is that in 2016 businesses can elect to expense (deduct immediately) the entire cost of most new equipment up to a maximum of $500,000 for the first $2,010,000 million of property placed in service by December 31, 2016. Keep in mind that the Section 179 deduction cannot exceed net taxable business income. The deduction is phased out dollar for dollar on amounts exceeding the $2.01 million threshold and eliminated above amounts exceeding $2.5 million.

Bonus Depreciation. Businesses are able to depreciate 50 percent of the cost of equipment acquired and placed in service during 2015, 2016 and 2017. However, the bonus depreciation is reduced to 40 percent in 2018 and 30 percent in 2019.

Qualified property is defined as property that you placed in service during the tax year and used predominantly (more than 50 percent) in your trade or business. Property that is placed in service and then disposed of in that same tax year does not qualify, nor does property converted to personal use in the same tax year it is acquired.

Note: Many states have not matched these amounts and, therefore, state tax may not allow for the maximum federal deduction. In this case, two sets of depreciation records will be needed to track the federal and state tax impact.

Please contact the office if you have any questions regarding qualified property.

Timing. If you plan to purchase business equipment this year, consider the timing. You might be able to increase your tax benefit if you buy equipment at the right time. Here’s a simplified explanation:

Conventions. The tax rules for depreciation include “conventions” or rules for figuring out how many months of depreciation you can claim. There are three types of conventions. To select the correct convention, you must know the type of property and when you placed the property in service.

    1. The half-year convention: This convention applies to all property except residential rental property, nonresidential real property, and railroad gradings and tunnel bores (see mid-month convention below) unless the mid-quarter convention applies. All property that you begin using during the year is treated as “placed in service” (or “disposed of”) at the midpoint of the year. This means that no matter when you begin using (or dispose of) the property, you treat it as if you began using it in the middle of the year.

Example: You buy a $40,000 piece of machinery on December 15. If the half-year convention applies, you get one-half year of depreciation on that machine.

    1. The mid-quarter convention: The mid-quarter convention must be used if the cost of equipment placed in service during the last three months of the tax year is more than 40 percent of the total cost of all property placed in service for the entire year. If the mid-quarter convention applies, the half-year rule does not apply, and you treat all equipment placed in service during the year as if it were placed in service at the midpoint of the quarter in which you began using it.
    2. The mid-month convention: This convention applies only to residential rental property, nonresidential real property, and railroad gradings and tunnel bores. It treats all property placed in service (or disposed of) during any month as placed in service (or disposed of) on the midpoint of that month.

If you’re planning on buying equipment for your business, call the office and speak to a tax professional who can help you figure out the best time to buy that equipment and take full advantage of these tax rules.

Other Year-End Moves to Take Advantage Of

Small Business Health Care Tax Credit. Small business employers with 25 or fewer full-time-equivalent employees (average annual wages of $52,000 in 2016) may qualify for a tax credit to help pay for employees’ health insurance. The credit is 50 percent (35 percent for non-profits).

Business Energy Investment Tax Credit. Business energy investment tax credits are still available for eligible systems placed in service on or before December 31, 2016, and businesses that want to take advantage of these tax credits can still do so.

Business energy credits include solar energy systems (passive solar and solar pool-heating systems excluded), fuel cells and microturbines, and an increased credit amount for fuel cells. The extended tax provision also established new credits for small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems. Utilities are allowed to use the credits as well.

Repair Regulations. Where possible, end of year repairs and expenses should be deducted immediately, rather than capitalized and depreciated. Small businesses lacking applicable financial statements (AFS) are able to take advantage of de minimis safe harbor by electing to deduct smaller purchases ($2,500 or less per purchase or per invoice). Businesses with applicable financial statements are able to deduct $5,000. Small business with gross receipts of $10 million or less can also take advantage of safe harbor for repairs, maintenance, and improvements to eligible buildings. Please call if you would like more information on this topic.

Partnership or S-Corporation Basis. Partners or S corporation shareholders in entities that have a loss for 2016 can deduct that loss only up to their basis in the entity. However, they can take steps to increase their basis to allow a larger deduction. Basis in the entity can be increased by lending the entity money or making a capital contribution by the end of the entity’s tax year.

Caution: Remember that by increasing basis, you’re putting more of your funds at risk. Consider whether the loss signals further troubles ahead.

Section 199 Deduction. Businesses with manufacturing activities could qualify for a Section 199 domestic production activities deduction. By accelerating salaries or bonuses attributable to domestic production gross receipts in the last quarter of 2016, businesses can increase the amount of this deduction. Please call to find out how your business can take advantage of Section 199.

Retirement Plans. Self-employed individuals who have not yet done so should set up self-employed retirement plans before the end of 2016. Call today if you need help setting up a retirement plan.

Dividend Planning. Reduce accumulated corporate profits and earnings by issuing corporate dividends to shareholders.

Budgets. Every business, whether small or large should have a budget. The need for a business budget may seem obvious, but many companies overlook this critical business planning tool.

A budget is extremely effective in making sure your business has adequate cash flow and in ensuring financial success. Once the budget has been created, then monthly actual revenue amounts can be compared to monthly budgeted amounts. If actual revenues fall short of budgeted revenues, expenses must generally be cut.

Tip: Year-end is the best time for business owners to meet with their accountants to budget revenues and expenses for the following year.

If you need help developing a budget for your business, don’t hesitate to call.

Call a Tax Professional First

These are just a few of the year-end planning tax moves that could make a substantial difference in your tax bill for 2016. If you’d like more information about tax planning for 2017, please call to schedule a consultation to discuss your specific tax and financial needs, and develop a plan that works for your business.

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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Oct 30 – Nov 5 vs.
Oct 23 – 29
Oct 2016 vs.
Sep 2016
Oct 2016 vs.
Oct 2015
Spot Market Loads +4.8% +2.8% +52%
Spot Market Capacity 2.0% +3.4% 4.2%
Van Load-To-Truck +9.4% 6.0% +86%
Van Rates (Spot) +3.0% +2.5% 2.9%
Flatbed Load-To-Truck 1.6% +13% +47%
Flatbed Rates (Spot) 0.5% +1.6% 4.5%
Reefer Load-To-Truck +13% 0.8% +54%
Reefer Rates (Spot) +3.7% 0.5% 2.1%
Fuel Prices 0.4% +2.5% 2.6%
Van Rates Near 2015 Levels

Rates Rise for Vans and Reefers

Oct 30 – Nov 5 – Rates rose last week for vans and reefers. For vans, rates were up 5¢ week over week, and were just 1¢ below where they were a year ago. For reefers, rates looked more like the June produce peak than the first week in November, jumping 7¢ from the previous week.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.
Last update: 11/8/2016 – Next update: 11/15/2016

Fuel Prices
-0.4%$2.47 / gallon
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Industry Trends - Spot Market Industry Trends - Van Industry Trends - Flatbed Industry Trends - Reefer Industry Trends - Fuel Prices
Industry Trends WEEK MONTH YEAR
Oct 23 – 29 vs.
Oct 16 – 22
Oct 2016 vs.
Sep 2016
Oct 2016 vs.
Oct 2015
Spot Market Loads 3.6% +2.8% +52%
Spot Market Capacity 1.2% +3.4% 4.2%
Van Load-To-Truck 0.2% 6.0% +86%
Van Rates (Spot) 0.6% +2.5% 2.9%
Flatbed Load-To-Truck 8.0% +13% +47%
Flatbed Rates (Spot) +0.5% +1.6% 4.5%
Reefer Load-To-Truck +2.2% 0.8% +54%
Reefer Rates (Spot) +0.0% 0.5% 2.1%
Fuel Prices 0.1% +2.5% 2.6%
October Load Availability Beats 2015 Level

Rates Rise in October for Vans and Flatbeds

Oct 23 – 29 – Load availability and rates rose in October, compared to September. Freight volume also exceeded 2015 levels for the month, but rates did not catch up to the previous year’s highs.

The chart above depicts national average spot market rates, including fuel surcharges for the past four weeks. Rates are derived from DAT RateView.
Last update: 11/1/2016 – Next update: 11/8/2016

Fuel Prices
+0.0%$2.48 / gallon
Trucking Success partners with DAT to offer a special on the TruckersEdge load board. Sign up for TruckersEdge today and get your first 30 days free by signing up at http://www.truckersedge.net/promo123 or entering “promo123” during sign up.