Transfix Take: Weekly Market Update (Dec. 7)

Tight, Tighter, Tightest

As we drive into the last month of the winding road that has been 2020, we come off yet more record highs. “During Thanksgiving week and into the close of the month, we’ve seen all-time records for tendered volume and tender rejections — and even records on rate per mile,” Justin Maze, Transfix’s senior manager of carrier account management, says.

The November Logistics Managers’ Index (LMI) report showed capacity contracting for the sixth consecutive month, standing at 35.1%, which is down 2.9 points from October, Freightwaves reports. The LMI is a diffusion index in which a reading above 50% indicates expansion and a reading below 50% indicates contraction. Additionally, the November survey of logistics executives registered 70.8% growth for the logistics industry, the fifth-highest level since its inception.

“We are seeing some loosening in the Southwest and South, but don’t take this the wrong way,” Maze warns. “These regions are still tight relative to overall indicators; we are just feeling slight looseness left from September and October. On the flip side, we are starting to see the Northeast rapidly tighten up, as we head deeper into December. The Midwest and West are still tight without much change.”

Shippers continue to search for additional capacity with little luck. On Black Friday, the Outbound Tender Reject Index (OTRI) reached another all-time high at 28.46%, according to Freightwaves. Since then, OTRI declined by nearly 3% but still remains extremely high at 25.82%. Carriers are picking and choosing the freight with which they can be most operationally efficient right now. They are avoiding freight that causes drivers to burn hours, facilities that are known to have issues, and any other operational inefficiencies. Carriers are focusing on how to most effectively use their equipment while the demand is so high, as adding capacity to fleets seems nearly impossible right now.

What’s Next?

The pandemic pushed more holiday shopping to e-commerce, and many shoppers were surprised by the far-off delivery dates they encountered. Cyber Monday alone hit more than $10 billion dollars, which translates into more freight needing to be moved. Maritime numbers show a ton of freight coming from overseas, as retailers continue to stock for the holidays and COVID resurgence. Ocean Bookings (freight not yet loaded onto a ship) to the U.S. generally slow down going into December, but bookings are increasing through the end of the month.

“During the next two weeks, we expect to see some type of easing, but tender rejections, volumes and rates won’t go too much lower than their current levels,” Maze says. “We will see a similar trend to what we saw in November and December: 15 days of a heightened-but-stable market leading us into another holiday week of possible records to close out 2020.”

Transfix expects 2021 to start off strong for the trucking industry. Most experts see Q1 as a breathing or down period, but that may not come until a little bit later. ACT Research has reported two consecutive months of record supply tightness. In fact, “the combination of strong demand and tight supply pushed the Supply–Demand Balance to its tightest level in survey history, now at 74.9,” according to

“There will be no switch to flip this off right after the new year starts,” Maze says. “Next week, we will talk more about the impacts the vaccine will have directly and indirectly on capacity, and how long they could last.”


Transfix Partnership Provides Additional Benefits to Carriers

Transfix announced a strategic partnership with project44 that will integrate project44’s visability products into Transfix’s freight brokerage, reports. This multiyear collaboration will provide Transfix shippers with transformative capabilities to better manage their supply chains in real time.

The partnership enhances the GPS-based visibility from Transfix’s smartphone app, which is used by carriers. Transfix’s free transportation management system (TMS) lets small carriers use Transfix’s network to expand access to capacity for shippers. When project44’s electronic logging device–based (ELD) tracking is added, shippers and brokers will get predictive estimated times of arrival (ETAs) through the app.

Going forward, Transfix’s core carriers will be able track fleets via ELD, and dispatchers will be able to confirm which trucks are assigned to which shipments. “This will eliminate manual tracking errors and reduce the burden on drivers to report on their status and location,” Eric Johnson wrote.

“The need for visibility is more acute than ever in an environment where demand for capacity is fluctuating, while consumer delivery demands are heightened,” Transfix CEO and President Lily Shen said. “We are aligned on the critical importance of creating transparency and efficiency through technology and data. Our partnership will be game-changing for the transportation industry and our mutual clients.”

With the uncertainty and volatility surrounding the U.S. economic recovery, shippers need a partner that can help them adapt and excel — no matter the circumstance. Shippers turn to Transfix for our leading technology and reliable carrier network. As volumes drive higher, we are here to help: Learn more about our Core Carrier program and Dynamic Lane Rates. As part of our ongoing market coverage, we’ll continue to provide breaking news, resources and insight into emerging trends and the pandemic’s impact on the transportation industry.

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