Last week we continued to see a rise in the number of load volumes to truck ratio. Freight volumes continued to be strong and truck load earnings continued to rise. With general market conditions improving and looking at macro economics we see little evidence freight volumes weakening to the end of July.
The threat of the lockdown back in March created panic-buying, and then freight volumes dropped heavily due to majority of businesses being closed. However even though we are seeing regions going back into lockdown, the restrictions are less severe this time, with focus being more on service based industries going into lock down, which do not have a great impact on freight volumes.
As demonstrated by June’s retail sales report, consumer demand remains strong, and the overall data reports are showing the economy is on a more solid basis with a bull housing market and manufacturing data showing slow return to growth. We therefore see the typical seasoning decline not taking place for this week leading to the end of July, meaning carriers are currently in a strong position, and are able to reject more freight and continue to negotiate higher freight spot rates.
Amongst the regions with the strongest load to truck ratio were Atlanta, Cleveland, and Los Angeles. The only market we saw to begin to decline last week was Miami, FL.
The Mexican border markets have been booming, such as Laredo, El Paso, McAllen, there has been extreme consistent tightness of capacity and we are expecting carriers to continue this week to take real advantage of the spot market activity in these regions.
We are also seeing through recent data released, manufacturing in NY and PA sectors are back into positive. This is good news for both Shippers and Carriers on the East Coast that will also translate to begin to impact the carrier rates in the rest of the country.
Looking forward we see general expectations for the next six months being positive both for general business conditions and shipments.
Even though we are expecting volumes to come down at some point, there still remain strong indications that this will take some time. Traditionally August is a period where the market does slow down and bounces a little leading to the end of September, and then slowly we see a pick up taking place going to November where volumes do pick up significantly heading into the holidays.
However for the time being we do not see market conditions reflecting previous years. We are expecting high volumes to continue to the end of July, unless there is a dramatic disruption in the market.
In addition we should mention, please be aware of weather reports this week that are showing higher risk of heavy thunderstorms that could cause flooding in regions such as in Midwest and Southeast. This may cause truck delays due to the heavy rainfall and potential road closures.
As always we are here to help you move your freight.
If you have any further needs or requirements please contact us and we will do all what we can to serve you.
Have a great week, stay safe and thank you.