Domestic Truckload Freight – Market Update
The demand for truck capacity still remains well above anything the industry has ever seen. To put it into perspective, there were 62% more tenders last week than there were during the same time frame last year. This volume is astronomical, even for the holiday season. The Outbound Tender Volume Index (above) is a clear visual of how much more freight is on the road.
With the steady influx of outbound tenders, it is no surprise that the Outbound Tender Rejection Index is still over 25%. Yes, over one in four loads are still being turned down by carriers. This number will rise, along with the freight volumes, as we approach Thanksgiving.
In reference to the chart to the right, it becomes clear that tender rejections will increase through Thanksgiving, relax slightly, then increase again through Christmas. Many drivers take time off during the holidays, taking capacity off the road, further decreasing capacity in a market that is already backlogged with shipment orders.
As mentioned almost weekly, spot rates are continuing to out-pricing contract rates, which is another reason tenders are being rejected. Rates are certain to break all-time highs during Thanksgiving week, given the current market volatility. Capacity will be as difficult as ever to secure for the holiday week and looking forward through the end of the year.
At MegaCorp we pledge to continue to provide reliable service to our clients, thanks to the relationships we have built with our vetted and dedicated carrier partners.
In recent years by this time in the calendar year, the ports see a decrease in shipments because the majority of holiday freight from overseas has already made its way to the U.S. However, looking at the inbound shipment graph to the right (with 2020 in blue), it shows a large increase of inbound maritime shipments to LA. It could be additional holiday freight, but with the uncertainty of COVID and talks of stricter restrictions, this is not likely to be holiday-related. The trends we see in the market today may not level off in January and have the potential to further affect capacity well into Q1 of 2021.
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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