The Weekly Freight Report for November 27, 2020
The Top 6 Stories in Freight
Here’s what’s happening this week:
- The Cass Freight Index shows a v-shaped recovery
- Pay increases alone won’t fix the driver shortage
- Reefer demand hit all-time high ahead of the holiday
- Spot rates expected to inflate over the next few weeks
- Retailers and consumers are feeling optimistic about holiday fulfillment
- Survey indicates manufacturing sector is making positive gains
The hottest stories in freight can be found here, in the Weekly Freight Report:
1. Cass Freight Index shows V-shaped recovery
The Cass Freight Index is back in positive territory for the first time since 2018. The reading shows shipping volumes rising 2.4% Y/Y in October… the best growth since Oct 2018. Increases are being backed by healthy consumer spending, economic reopenings and schools starting back up. With optimism in healthcare advancements, the growth is expected to continue. Get the full update here.
2. Pay increases alone won’t fix the driver shortage
The OTR truck driver count has reached an 8-year low. And while the industry has faced driver shortages before… experts are saying that this time, it’s different. Increasing driver pay won’t bring back the 30K+ drivers needed to help the capacity shortage. Carriers need to switch up their strategy. Here’s where to start.
3. Temp controlled capacity tapped out
The Reefer Outbound Tender Rejection Index hit an all time high of 48% this week. In layman’s terms, that means finding a refrigerated truck right now is extremely difficult. And it couldn’t be worse timing- with the upcoming holidays and soon to be released COVID-19 vaccines, reefers will remain in high demand. Shippers, prepare to continue paying premium reefer rates for months to come. Read the full article here.
4. Spot rates expected to inflate over next few weeks
SHIPPERS: Expect spot rates to spike over the upcoming weeks. The two reasons? 1. Spot rates have had a lagging relationship with rejections and tender rejections rose to another all-time high this week at 27.84%. 2. Thanksgiving is coming up and drivers will be searching for freight that takes them home. The good news is, rejections typically have a natural ceiling and the analytics at Freightwaves believe we are nearing that point. Get the full details here.
5. Retailers and consumers are feeling optimistic about holiday shopping
A recent survey shows consumers and retailers are feeling confident about holiday fulfillment. 85% of consumers said they believe their online holiday purchases will arrive on time. And 91% of retailers feel prepared to manage the surge in e-commerce orders. While retailers did express concerns about managing volume and citing inventory levels, overall, everyone is feeling optimistic. Check out the survey results here.
6. Survey indicates optimistic view for the manufacturing sector
The National Association of Manufacturers ran a quarterly survey finding that 66% of manufacturers are feeling positive about their outlook. This is up from 33.9% when the same group was surveyed back in May. And while the sector has seen improvements, reaching pre-pandemic levels and recovering labor issues, there’s still a lot of work to do. Check out the full Transport Topics article here.
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