Market Update: September 14, 2018

Hurricane Florence has made landfall this morning rocking the Carolina coastlines. Capacity in the Southeast region has already tightened significantly, and with disaster relief (FEMA) on the horizon, capacity in other regions will start to tighten as well. Retail Peak season is in full swing causing tighter capacity and we expect that trend to continue through the end of year past the holidays. The biggest areas of concern right now are North Carolina, South Carolina, and the surrounding states due to Hurricane Florence.

Market Effects of Hurricane Florence

“Looking at the inbound tender market share (ITMS) values in North Carolina, there are already anomalous decreases in load volumes moving into the area that is forecast to have the largest rain.” – Freight Waves

“Charlotte’s volume has jumped over the past 2 days with outbound tender market share (OTMS) jumping from 1.7% to 1.81%. Many shippers will try to get freight out in front of the storm as they know they will not have capacity in the market nor do they want freight sitting in the warehouse.” – Freight Waves

Market Update: September 7, 2018

Retail peak season has begun and will continue through the end of the year, causing capacity to tighten in all areas. Tropical Storm Gordon made landfall on Wednesday which will decrease capacity and inflate rates in the Southern regions, but will have a ripple effect to surrounding regions as well. With Retail peak season and the continued weather issues, we expect overall capacity to tighten in the next month or so and continue through the remainder of the year.

What an Autonomous Truck Port Could Look Like

With self-driving trucks, the future of trucking could feature autonomous truck ports where human drivers would bring loads to autonomous trucks that would take them across the country. This could have a serious impact on drivers in the less-than-truckload sector. Image via Driverless Report.

Market Update: August 24, 2018

As we near September, we’re starting to see the annual retail surge, particularly on the West Coast, but we expect it to start affecting capacity in all regions soon. Capacity is going to tighten significantly for the upcoming Labor Day holiday. That coupled with the retail surge, we expect capacity to remain tighter for the rest of the year.

A Volatile Reefer Market

From FreightWaves – “Since the beginning of the year, the reefer tender rejection index for Houston (RTRI.HOU) shows dramatic increases and decreases in an almost predictable pattern. The overall reefer tender rejection has decreased significantly year to date, falling from a high of nearly 60% in the first quarter to a much more agreeable 33% in August. While this decrease in rejection rates over time would lead one to believe the market has stabilized, rejection rates are volatile each month in an observable pattern.”

Market Update: August 17, 2018

As the summer freight boom declines, so are truckload rates across all modes. However, market conditions are starting to tighten in the Midwest region. We are expecting with the Labor Day holiday and the retail surge starting in the upcoming month that capacity will continue to tighten in all regions of the country.

Rates Drop Seasonally, but Volumes Increase

Market Update: July 26, 2018

As we near August, we’re finally seeing some relief from the tight capacity that defined most of May and June. Dry van, reefer and flatbed rates have dipped slightly from their record highs as a result of less loads flooding the market and more trucks becoming available. We expect the market to remain steady until the end of next month when the amount of imports rise, big box store volume increases, and shippers begin stocking up in preparation for the holidays

Truckload Capacity Gradually Eases From June Peak

Source: KeyBanc Capital Markets, inc.

Market Update: July 12, 2018

The market remains relatively unchanged over the past couple weeks with significant tightness and high rates out of the South. We expect rates to begin leveling out and the southern produce season boom to subside in the coming weeks. If history is any guide, that will mean the capacity restrictions will slowly start moving Northwest and begin affecting Illinois, Missouri, Iowa, Michigan, and Ohio.

Spot Market Trends

East Coast Imports Support Tight Capacity

Source: KeyBanc Capital Markets, inc.

Market Update: June 27, 2018

Similar to last week, the market continues to be extremely tight in the Southeast due to a strong produce season. We’re also seeing capacity tighten in the Southwest and Texas with increasing delays getting trucks across the border into the US. We expect the market to continue to tighten in the coming weeks with end-of-month/end-of-quarter orders coupled with the approaching holiday. “As a shipper, being flexible with carriers/drivers will help in these market conditions,” says Brian McIntyre, Director of Operations at Sheer. “Since equipment is hard to come by, you don’t want to limit yourself.”

Spot Market Trends

ELDs Appear to be Working

The FMCSA recently posted an infographic on their website showing a decrease in the percentage of driver inspections with at least one HOS violation.  The sharp decrease comes after the ELD mandate was implemented in December 2017, and further decreases after the enforcement date in April 2018.

Graph: FMCSA

Market Update: June 14, 2018

Spot Market Trends

This June, everyone is feeling the effects of a tight market after Memorial Day weekend and last week’s annual Road Check. Flatbed prices have hit another record high at $2.81/mile and the reefer load to truck ratio rose 57% since last week.

Demand Spikes in Dallas

As the Los Angeles market begins to level out after a delayed produce spike, the freight appears to be moving south as tender rejections are spiking in Dallas. The graph below shows the average tender reject index for the whole United States (blue) versus the tender reject index in Dallas (green).

Market Update: June 7, 2018

Spot Market Trends

Spot market rates are especially high this week as a result of rising fuel costs and a scarcity of trucks exacerbated by this week’s International Roadcheck. According to DAT, “the national averages for both van rates and reefer rates each increased 4¢ per mile, while the national flatbed rate continued to add to its record high, climbing another 2¢ to $2.75 per mile.”

West Coast Capacity Crunch

We’re seeing a large capacity crunch on the West Coast, especially in and around Los Angeles. This is primarily due to a delayed produce season. Tender rejections out of the Los Angeles market rose from below 10% in early May to almost 20% as we entered June.

Market Update: May 31, 2018

Memorial Day led to tighter capacity and higher spot market rates as we saw many independent carriers go home for the 3-day-weekend. Flatbed rates rose to another record high while reefer rates are up 2¢ per mile. We’re seeing especially tight reefer capacity coupled with high rates coming out of the South and Southeast due to a booming produce season.

Spot Market Trends

Outbound Tender Reject Index

The graph below shows contracted rates being rejected out of a specified market. Due to the peak produce season, contracted rates are being rejected at a high rate out of Tallahassee, Florida (white line). As the produce boom moves north through Georgia, we can see more rates being rejected out of Atlanta (green line) as rejections subside further south in Miami (orange line).