This freight market is here to stay for the remainder of the year.
We are currently six months after the panic-buying surge from early spring. Back then, it appeared to be the peak of COVID-related buying/shipping trends, when freight volumes plummeted in May as most of the country was experiencing “stay at home” orders. It was predicted that volumes would increase as the economy opened back up. However, many did not see this level of freight volume coming. There is 49% more freight on the road now than this time last year. The top graph compares this year in blue (YTD) to 2019 in green. For a normal year, shipping volumes remain fairly steady throughout Q3 and Q4 with a push right before Thanksgiving. The 2019 numbers indicate that these new volumes and rates are here to stay through the remainder of the year.
The increased volume has certainly elevated the tender rejection rate. For the past two months, the average has been 1 in 5 to 1 in 4 loads being turned down by carriers, compared to 2019 (in green) when only 1 in 20 loads was being turned down. Currently, the tender rejection rate is at 25%. As always, once MegaCorp commits to picking up a load, it is not given back or left on the dock.
The new “standard” of rejection rates are strong enough to keep spot rates high. These spot rates are more than contracted rates which is making it easy for carriers to turn down contract rate loads to pick up the higher-priced spot loads, keeping rates elevated.
Hours Of Service Update
In Trucker News, The Federal Motor Carrier Safety Administration’s hours of service was updated at 12:01am on 9/29. In summary, the change in regulation is that drivers can’t drive more than eight hours without taking at least a 30 minute break, which can be spent in off-duty mode, sleeper-berth or on-duty/not-driving status. That’s much more lenient than a 30 minute, off-duty break within the first eight on-duty hours.
This update modifies the sleeper-berth exception to allow drivers to split their 10 hour off-duty period into windows of seven hours and three hours, in addition to the existing eight hour/two hour option. It also adds that the shorter period in any split off-duty will pause the rolling on-duty clock. This allows drivers to extend their drive time limit and their on-duty window by two hours if they encounter adverse weather conditions or traffic congestion. The update also changes the short-haul exception available to some commercial drivers by lengthening their maximum on‑duty period from 12 to 14 hours and extending the distance limit within which the driver may operate from 100 air miles to 150 air miles.
Load to truck ratio from the prior 7-day average.
About 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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