Freight volumes are up 2.2% week-over-week signifying the additional holiday freight is making its way through the supply chain.
These holiday shipments are replacing some of the additional COVID related shipments that were starting to decrease and level out. The chart above is the nationwide Outbound Tender Volume Index and has been expanded out to show trends from 2018 (orange) and 2019 (green). We have started to follow the shipping trends of a typical year. However, there is nothing typical about a 50% increase of freight on the road year-over-year. There is not enough capacity or enough drivers to handle this volume. Looking at previous years, there should be an increase in volume until Thanksgiving.
The two charts to the right indicate what has been scheduled to ship from overseas (from China only) to the east coast and west coast. The comparison line for each graph are 2019 shipments. These have plateaued at an extreme level and have been holding steady for the last few weeks at an alarming number year-over-year. These are shipments that are ready to ship and will arrive to the US in about 10 days. With such an increase in volume, not all can be shipped via rail which has also seen a steady rise in pricing. Some of these shippers are opting to use truck loads for faster shipping. This has been further disrupting markets by displacing capacity because intermodal shipments are usually longer hauls (500+ miles).
It is no surprise that tender rejection rates continue to hover around 25% with so much additional freight on the road. This number doesn’t only stem from the capacity shortage and further displaced trucks, as mentioned above, it is also due to spot rates out-pricing contract rates, so it’s easy for carriers to turn down loads to seek higher-priced loads and/or more desirable lanes. Furthermore, there is still a driver shortage and most schools are operating at a 50% capacity so it is even more difficult to add drivers to the workforce.
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 our 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.
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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