Freight volumes remained strong as driver safety week starts

Continuing to sync our view with the market, we expected the holiday rates to increase as normal in line with produce season. This to us was normal, but the volatility has been extreme. The national average had diverged significantly even after the holiday lead up.

 

Capacity remained tight last week, and rates seemed to stabilize and then started to go back up again due to higher volumes and where they are settling is unusually high. We can put this to trucks being in the wrong place, or to a shortage of trucks but the actual number of load volumes significantly increased as well.

Capacity remained tight last week, and rates seemed to stabilize and then started to go back up again due to higher volumes and where they are settling is unusually high. We can put this to trucks being in the wrong place, or to a shortage of trucks but the actual number of load volumes significantly increased as well.

 

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Reefer capacity is one of the key driving forces on this. Where produce season continued to drive the west coast to east coast freight market and as usual the truck activity on the east coast of trucks tying to get back to the west continued to destabilize the market as annually expected.

There is little evidence that suggests freight volumes will not continue to remain strong.

The three main activities in the market:

  • The Covid-19 disruptions are continuing to evolve; no one can predict the spread of the virus or the policy, business or consumer response.
  • Trucking capacity has diminished significantly from the previous two years which is making the market more sensitive causing a lot more volatility.
  • CVSA’s Safer Driver Week started Sunday 12th and will continue to July 18th. During this week-long traffic enforcement safety initiative, law enforcement personnel throughout North America will be looking for drivers who are engaging in unsafe driving behaviors on our roadways.

We are seeing a lot of signals showing the recovery process seems to have passed and we are now at a 10% to 15% increase in volumes compared to other years, and the market looks like it is still going to rise.

 

We know we are getting a continuing COVID-19 increase specially across the sunbelt region including Los Angeles, Arizona, Dallas, Houston and Miami which all have pretty bad COVID-19 problems right now, their Reefer capacity is elevated more than normal right now.

Reefer volumes have been above the normal marginal levels, this could signal what could happen in other regions that could be a negative signal for the economy if people do have to go back to self isolation in their homes. The temperature controlled market led the initial COVID-19 surge with short runs for replenishment of inventories which was the most volatile. With closing of bars and limiting the restaurants capacity in some states this has significantly caused a surge in consumer food buying again, with everyone’s concern of another shutdown.

If this is replicated, we feel this will be a bad sign, as previously the lock down was nationwide, we are now looking at specific city’s or regions. As is difficult for companies to adapt to new regulations, closing, opening, closing and then reopening again, in between this, carriers are also facing new per state / per city regulations that they have to deal with and drivers are being effected, by having to adapt and manage their operations in various states.

 

With unload times taking longer at some receivers, where the receivers are facing shortage of staff with cut down operations, and also in some cases where the receiver is not open, so the disruption is something all shippers should be aware of taking place for carriers.

Including regulations for cleaning trailers at night, pickup and delivery times being impacted, these are examples of some of the kind of confusion the decentralized response to the virus is causing a lot of difficulties and risk factors across the country for shippers, receiver and national transportation providers.

Thank you so much of checking in with us and if you require more information please Contact Us and we will do all that we can to source that information for you.

Have a great week, and please stay safe. 

Thank You!