Houston Freight Rates Jump as Market Tightens Fast

What happened

Houston freight rates are climbing fast. In less than two weeks, Houston went from one of the loosest freight markets in the country to the second tightest. That is out of 135 markets tracked by SONAR, the data service from FreightWaves.

A "tight" market means there are more loads than trucks ready to haul them. One sign is tender rejections. That is when a carrier says no to a load it agreed to take under contract, usually because it can get a better rate on the spot market.

Here are the numbers FreightWaves reported on Sept. 23:

• Houston outbound tender rejections hit 10.47% on Sept. 22.
• That is up almost 3 points in one week and 6 points from a year ago.
• The Houston van spot rate went up 37% in one week.
• Tender volume, the number of loads offered, rose almost 2% in a week.
• Across the country, van spot rates averaged $3.42 a mile, up 4.27% in a month.

FreightWaves analyst Julie Van de Kamp said Houston moved from one of the loosest markets to one of the tightest in under two weeks.

What it means for owner-operators

If you run in and out of Houston, you may see better offers on the load boards right now. When shippers can't find trucks, brokers have to pay more to cover the load.

But costs are high too. FreightWaves put diesel at about $6.54 a gallon, close to its highest point of the past year. So a higher rate does not always mean more money in your pocket. Do the math on every load: miles, fuel, tolls and the empty miles to get back.

A hot market also brings more risk. When loads pay more, fake brokers and double brokers show up too. They offer a great rate, then the real payer never pays you. More loads also means more paperwork, and slow payment can hurt your cash flow when fuel is this high.

This could change quickly. Markets that tighten fast can loosen fast. Nobody knows how long this jump will last, so don't lock in big new costs based on one good week.

What to do next

• Know your cost per mile before you call on a load. Say no to loads that don't cover it.
• Check every new broker before you haul. Our guide on how to check a freight broker shows you how, step by step.
• Get the rate confirmation in writing, with the same broker name and MC number you checked.
• Keep your authority, UCR and IFTA current so you can say yes when a good load shows up.
• Think about how you get paid. Quick pay or factoring can keep fuel money coming in while rates are moving.

Want your permits in order so you are ready to haul? Call TCZ Permits at 956-526-6727. Filings can come at no cost when you factor with us.