The Top 7 Stories in Freight
Here’s what’s happening this week:
- Contracted freight needs innovation
- Produce truckloads break $10K per load
- Industrial real-estate thrives in pandemic
- Hopeful signals for shippers on rate relief
- Lack of truckers leads to capacity constraints
- LMI shows capacity has contracted for 6 consecutive months
- The great freight rally will continue into 2021
The hottest stories in freight can be found here, in the Weekly Freight Report:
1. Innovation needed on contract freight
70% – 80% of all truckload spend is on contracted freight…but you wouldn’t know it if you read the splashy headlines. The start-ups and new technology that dominate the media attention focus almost solely on spot-market applications. And that’s a HUGE miss. The logistics industry has funneled billions in venture capital into digitizing spot market and short-term freight solutions. Folks… we’re here to tell you, “the king has no clothes”… Shippers should be focused on the success that comes from a better contract freight network. Put your energy there and get the details from Supply Chain Brain here.
2. Produce truckloads break $10K per load
It’s the most wonderful time of the year… for everyone but product shippers. In November, truckloads hauling produce hit record highs. Shipments went for over $10K per load in some parts of the country. The good news is, we’ve seen a 10% dip in rejections since Thanksgiving. Freightwaves says shippers should see rate pressures ease a bit in the coming weeks. Check out what’s driving increased produce demand here.
3. Industrial real-estate thrives in pandemic
Industrial real estate is on fire… Increased online demand and eCommerce has driven shippers to need more warehouse space. And industrial real estate is booming so much, experts are predicting a warehousing capacity crunch in 2021… which of course means more money for shippers needing more inventory space. Shippers beware. And get the full details here.
4. Hopeful signals for shippers on rates
Finally, some good news for shippers. After 7 months of inflationary rates and tight capacity…DAT’s Spot Premium Ratio fell for the first time since May. Though this is not a guarantee that rates will decrease, it is a leading indicator that rate pressure is releasing. Check out the report here.
5. Lack of truckers leads to capacity constraints
88,000 trucking jobs were lost from February to April. And regardless of the Q3 surge, only 78% of them have come back. Now shipping demand is higher than ever… and drivers have disappeared. Turns out the drivers shortage is placing a big constraint on capacity and the economic recovery in general. JOC provides solid analysis in their For-Hire Trucking Employment Index. Take a peek.
6. LMI indicates six months of capacity contraction
The November Logistics Manager’s Index shows six consecutive months of capacity contraction… and that isn’t about to change. Ecommerce orders are booming while warehouse space is getting limited. And if capacity wasn’t tight enough, holiday returns and a potential vaccine is sure to further the crunch. Freightwaves anticipates demand for logistics services will continue well after the Q4 rush… get the full story here.
7. The great freight rally will continue
The leading question for shippers going into the new year? What will rates look like? According to the CCJ consensus, everyone is optimistic about the recovery and it seems seasonal trends will be likely be tested. But when it comes to contract rates, there is a bit of uncertainty. If carriers push big contract rate hikes (15% – 20%), the spot market will weaken. Conversely, if contract rates rise marginally (7% – 10%), that could mean a continued strong spot market. The future is still unknown, and for now, shorter-term RFPs are the safe bet for shippers. Get the full details here.
Need help moving freight across North America? FLS can help. Our network of 54,000 carriers and 400,000 trucks is a great asset to any shipper… and our service levels are impeccable. Give us a try… Get a quote today!