The Top 6 Stories in Freight
Here’s what’s happening this week:
- An avalanche of port volume will press OTR freight into Q1
- Cass Index predicts elevated freight volumes and growth in 2021
- Holiday pause will create freight bottleneck in the new year
- Bracketing season has carriers trading pricing power for home time
- Vaccine distribution will put pressure on the whole cold chain business
- Analysts are predicting an accelerated truckload market in 2021
The hottest stories in freight can be found here, in the Weekly Freight Report:
1. Port volume will press OTR freight into Q1
Container volume is seeing the biggest upswing in 10 years. By now everyone is aware of the issue on the West Coast ports. But now the sheer volume is spilling over to East Coast ports. It’s an avalanche of volume that will press the over the load freight systems in the US well into Q1. This is a clear sign that January volumes and rates will not see the normal winter lull. Get the details here.
2. Freight volumes expected to grow in 2021
The Cass Freight Index shows shipping volumes dipped 2.2% in November when compared to October. This is the first dip in five consecutive months of strong recovery. But the slump isn’t expected to last. ACT Research expects a 3.9% U.S. GDP growth in 2021. And Cass predicts that low inventories at U.S. retailers and vaccine distributions will elevate shipping volumes in the new year. Shippers, this means rates are likely to accelerate as well. Get the full details.
3. Holiday pause will create freight bottlenecks
You can expect the new year to kick off with a bang in the freight world. Much of the supply chain will take the week off between Christmas and New Year’s. And when they return… they’ll come back to a massive backlog of freight. With volumes at all-time highs, freight will be left to pile up and ports and docks with far less capacity to move or store it. And when you throw holiday returns into the mix… all transportation modes and warehousing will be stressed. Read the article.
4. Carriers trade pricing power for home time
It’s bracketing season! And it could be good or bad news for shippers… depending on where your freight is located. The good news? If the shipment brings the carrier home, they’ll be more willing to give up pricing power. The bad news? If your load is out of the way, finding any capacity will be extremely difficult. Tender rejections are up and The Outbound Tender Rejection Index is sitting at 26.75%. That number is expected to go up and higher as we get closer to Christmas. Get the details here.
5. Vaccine demand puts pressure on supply chain
Everyone is talking about the vaccine. And those in the supply chain are talking about how distribution plays into an already thin supply of trucks. 300 million doses of the COVID vaccine will be shipped across the U.S. in the coming months. And while that normally wouldn’t phase the freight market, this year isn’t like any other. Capacity is tight everywhere. The distribution of the vaccine will extend beyond the small group in the pharma supply chain and will likely impact the whole cold chain business. While no one can completely predict the effect, look for reefer rates to stay high through the first half of 2021 as the spillover supplies touch the broader market. Get the story here.
6. Analysts expect accelerated market in 2021
What’s in store for the TL market in 2021? Most analysts expect the strong cycle to continue. A look into the crystal ball shows the economy re-opening, manufacturing recovering, delayed cap-ex getting back to normal and the re-stocking cycle to continue. All this points to continued high volume, limited capacity and, yes, high rates. When will it end? When the demand cycle rolls over. Get the details and strap in.
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