Freight Market Update – October 20, 2020
As we predicted earlier this month, there is a slight, temporary decline in overall tenders compared to the last couple of weeks. This trend should continue into next week, then the holiday increase will pick up right after Halloween and continue to rise through mid-December. Even with the slight decline week-over-week, there is still a jaw-dropping amount of freight on the road compared to this time last year, which is currently at 55.2% more year-over-year.
With a decrease in overall tenders, the tender rejection has also decreased by 1.5% from last week, bringing the rejections down to 24.42%. For most, this change is so subtle that it is going unnoticed in many markets. No matter which way you look at it, tender rejections have been over 20% since August 1, and it is optimistic to think that we will see under 20% anytime soon. Our hopeful prediction is for this to happen in Q2 of 2021.
As we have previously discussed, the new “standard” of rejection rates is strong enough to keep spot rates high. However, shippers are hosting mini-bids to keep competitive with current trends, which means that contract rates are also on the rise. This is actually good news because over an extended period of time, this will help decrease the tender rejections which will lead into decreasing spot rates. Unfortunately, the timing is not ideal for shipping costs to decrease. With a new surge in COVID cases and the time of year (holiday season), overall rates are about to increase again as consumer purchasing increases, further adding to the strain on supply and demand for trucks.
At MegaCorp, we have strong relationships with our reliable, vetted carrier partners so when we commit to picking up a load, we are able to see it through no matter what market conditions are from week to week.
Exceptional customer service and clients’ reputations to their customers are very important to us, so we make it a priority to pick up and deliver every load entrusted to MegaCorp.
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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