Freight volumes have returned to the new “normal” after the temporary decrease in volume last week, which was expected after Labor Day weekend. The United States has almost 50% more freight on the road than this time last year.
Tender rejections are still happening at an alarming rate of 25.63%. This means that over one in four loads are being rejected by carriers to seek higher-paying loads and/or more desirable lanes.
As a reminder, once MegaCorp commits to picking up a shipment, we will see that shipment through and will not leave it on the dock.
Contract vs. Spot Rates
The compilation of factors stemming from COVID (consumer spend focused mostly on goods instead of services, more spend on groceries, and manufacturers repositioning their facilities to keep up with new demand) have caused spot load rates to surpass the cost of contract rates. Contract shipments have been given back in large numbers or have been renegotiated due to the surge in cost. This sets the stage for even higher spot rates. Adding fuel to the fire for increased spot rates, there is a shortage for rail capacity and those loads are now being shipped via truckload. The dark graph below indicates what is on the way to the west coast in the form of containers. These rates are not decreasing anytime soon. The natural disasters discussed on the next page certainly don’t help.
We are closely watching the tropics. Hurricane Sally is about to make landfall at the Mississippi and Alabama border. Localized flooding and power outages will be the main story with this storm.
There are still 75,000 without power in Louisiana from Hurricane Laura, which made landfall early August 26. FEMA continues to utilize truckload capacity as that area is recovering.
Unfortunately, there are still two and a half months left of Hurricane Season.
The fires in the Pacific Northwest added additional strain to capacity with many areas difficult to get into/out of. In California, record-shattering wildfires have charred more than 3.2 million acres. Three of the top four California wildfires are still burning now. Oregon has seen over 900,000 acres burn thus far. In Washington state, blazes have burned more than 665,000 acres of land and clogged the skies with smoke. The good news is that these fires are subsiding and evacuation orders are being lifted in most areas, but there is still a long way to go before air quality is back to normal. The image to the right shows the air quality on 9/10 in San Francisco, hundreds of miles from live fires.
Shippers should rely on logistics partners such as MegaCorp that do not give back loads or leave loads on the dock to eliminate unnecessary stress and costs.
Load to truck ratio from the prior 7-day average.
MegaCorp Logistics, founded by Denise and Ryan Legg in 2009, specializes in full truckload shipments (dry van, refrigerated, flatbed, intermodal, etc.) and less-than-truckload shipments throughout the US, Canada, and Mexico. MegaCorp is committed to creating long-term, strategic partnerships with our clients who range from Fortune 100 companies to regional manufacturers and distributors. We serve all business sectors of the US economy including (but not limited to) food, retail, government, textiles, and metals/building materials. We strive to offer the best to our clients, transportation partners, and employees– It’s the Mega Way!
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