LATEST ADVISORY SPOT MARKET UPDATE
WE ARE STILL OUT OF ANY FORM OF SEASONAL NORMALITY
October is meant to have a feel of normality, but this is
not the case for 2020. We have seen much higher rejection rates by carriers as
they have more choice across the country for freight volumes that continue to
be extremely above normal, and we have seen shippers having to reject more
rates as well due to very high market rates that have gone beyond any form of reality
that the market can handle.
Even though we have seen much higher than normal out of
season rates, there seems to be a much more of a stable market in October, and
a slight fall in some areas. How far this fall will continue until end of
October and then beginning of November where holiday season freight starts to
kick in is still to be seen.
Looking at Van vs Reefer, Van rates seem to be slowly coming
down a few points as Reefers seem to be falling a little bit stronger, as
Reefers are a little more volatile with a little less volume in the market
overall, but the amount of volumes remains extremely high with a lot of volume
still being shown across the country.
Many carriers are also not fulfilling their contracts as
they are able to make a lot more money on the spot market as that demand has
grown beyond anyone’s expectations.
There is nothing to show us that the market is shifting
significantly, there is a very small down trend period, but there is no
indication that the market is going to fall, it’s more like a slight stall
before it rises again for the holiday period.
We are seeing some of the largest market decreases in some
of the main markets in the United States, such as Los Angeles and Fresno, CA,
Elizabeth, NJ, Ontario, CA, Allentown and Philadelphia, PA, and Cleveland and
Columbus, OH. So we are seeing some of the largest markets in the United States
cooling, but they are still extremely active and rates are still extremely elevated,
and overall the data is showing all markets across the country as active and stable.
Carriers are generally abandoning the smaller markets and
heading towards the larger markets, where freight rates remain strong, hence
creating further capacity crunch in the smaller markets also, causing further
rises in their rates.
As larger shippers are reorganizing their supply chains to
meet the holiday season demand, carriers continue to be in a strong position.
Volumes still remain at very high levels even though we did see a small maybe
5% drop since the beginning of this month, with a steady trickle down.
Some of the drop could be due to carriers renegotiating
their contract rates causing freight load volumes to weaken slightly on the
spot marekt. Over all capacity is still extremely tight, so the market continue
to have high freight volumes and very tight capacity, we see rates will
continue to be high.
As we continue to see the public spend less on services and
more on products and goods such as grocery, clothing, furniture and home
improvements all being up on last year this continued demand is keeping the
freight market extremely busy.
With holiday season coming up fast, and even though we are
without a second stimulus package, consumer confidence index remains high and
is not faltering, so we feel the holiday season will be tight for shippers and
carriers.
While we still have the pandemic with us, we are at a reflection
point about the freight market and its future and how it will develop post pandemic.
Make sure you contact us if you need any assistance with moving your freight. Simply send us the freight requirements and we will do our best to find you the capacity that you need.
Thank you so much for being with us today, have a wonderful day, and stay safe.