Freight Market Update December 1, 2020
Thanksgiving week has come and gone, but it left its mark in the history books with record freight volumes and rejections. The record was set at 17,079 on the Outbound Tender Volume Index, well above the 16,231 record which was set the previous week. Even though we currently find ourselves in the post-holiday valley of tender volumes, the tendered freight is still 49% higher than this time last year (green) and 56% higher than 2018 (orange).
As expected, the record in freight volumes is still accompanied by record rejections. Last week’s rejections were consistently above 28%, with a peak at 28.46% of tendered loads being turned down by carriers. While there is a temporary decline in rejections (currently at 27.93%) due to the post-holiday volume decrease, we do expect this rejection rate to exceed 30% before year-end. Rejection rates typically climb from early December until Christmas as shown in the graph above with 2019 in green and 2020 in orange. However, freight volumes should not cross the 17,000 mark again.
With the continued surplus of tenders and rejections, rates remain high and hovering around the record for the national average. The spread between contract rates (blue) and spot rates (orange) is starting to increase again which further aids in rejection frequency and cost. Another factor is that, just as Hurricane season ended on November 30, the torch was passed over to winter storms. The eastern half of the US experienced strong storms early this week and heavy snowfall from the Midwest to the Northeast. Trucks are a bit displaced and delayed overall due to this storm. This is going to affect the capacity for the remainder of the week as the market comes back up from the post-holiday decrease in tenders.
With truck capacity being so tight, we wanted to remind our valued clients that we are also well-versed in intermodal shipping. If your ship time is flexible and your product has the potential to be shipped this way, please reach out to your MegaCorp contact for an intermodal quote, to determine if this is an alternate option for at least some of your loads.
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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