50% More Freight Than 2019 Holds Steady
Freight volumes are holding steady since last week, with approximately 50% more freight on the road than this time last year. This steady surge in truckloads stems from consumers changing their spending habits, with more at-home-meals/home improvements/etc; an influx of shipments arriving to the ports that were put on hold due to COVID; and manufactures repositioning their facilities to keep up with new demand.
Have we finally reached a peak in shipment volume?
The good news is, yes! The bad news is this peak is more like a plateau and is here to stay for the rest of 2020. We will continue to see the tender rejection rate hovering around 25%, with shipments being turned down or left on the dock as carriers accept higher-paying loads (as a reminder, MegaCorp will not leave loads on the dock once committed to picking up a load).
This extreme plateau is here to stay because of the aforementioned new consumer spending habits, the backlog of shipments arriving to the ports from overseas, Hurricane Laura relief efforts, Labor Day, and the upcoming holiday season.
The backlog of shipments into the ports has reached its peak but still remains elevated. As the port shipments catch up, the decline will not be noticed because of the Labor Day surge and also because Hurricane Laura has placed an additional strain on capacity. The dip in freight volume after Labor Day (similar to what we see after the 4th of July) will also not be as noticeable this year as capacity will continue to aid Hurricane Relief efforts for the next couple months, but we expect the relief effort strain to be most noticeable in the next four weeks.
The Labor Day surge will roll right into the 72 hour Safety Blitz by the Commercial Vehicle Safety Alliance, which will take place September 9-11. Last year, this placed 3,173 drivers out of service, and many drivers used that time to take a vacation. If there is a chance for a decline, it will be the very end of September into the first week of October. With the holidays right around the corner, the decline, if any, won’t last long.
When a disaster occurs, FEMA’s aid is typically necessary for a few months. FEMA assesses the damage and sends immediate relief to areas that need it the most, then they create a recovery plan. With the increase of supplies being shipped by FEMA, due to the severe damage caused by the Category 4 hurricane, this will continue to increase the strain on capacity throughout the United States. This strain will be imminent for the next few months and will be most noticeable in the next four weeks.
Hurricane Laura also temporarily closed major export ports and highways, creating a backlog of truckloads that needed to get to the port or that were held up at an inland layover which further added to the capacity strain. Additionally, rest-stops and gas stations have been closed leaving trucks scrambling to find fuel and places to rest around the impacted areas.
MegaCorp’s focus on reliability and customer service continues during this difficult time.
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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