Beware the Blitz
May kicks off with International Roadcheck, aka Trucking Inspection Blitz Week, May 4–6. During this 72-hour period, commercial motor-vehicle inspectors throughout Canada, Mexico and the U.S. conduct checks of commercial motor vehicles and drivers. This year, they are set to emphasize hours of service and lighting violations, according to the Commercial Vehicle Safety Alliance (CVSA), which runs the program.
“The inspection blitz will put a lot of pressure on shippers, as supply traditionally comes off the road,” Maze says. “This will start May off with higher tender rejections and higher rates in most lanes. When the blitz is over, we should prepare to start seeing more freight pushed into the markets from an endless amount of container imports. The Midwest will continue to see major markets loosen, as capacity once again shifts toward the coasts and port markets. Capacity will be disrupted, as shippers are using ports they may not have in their routing guides.”
Freight Moving in May
“Many indices to which we’ve pointed in the past few weeks suggest the markets are gearing up for an overflow of demand,” says Justin Maze, Transfix’s senior manager of carrier account management. “Ports throughout the country continue to be fed seemingly endless containers of goods. This includes smaller ports, such as New Orleans and Baltimore. Importers are spreading out their imports to where they can get them in the fastest. They are trying to keep up with Americans’ demand — consumer confidence is at a 14-month high. Although consumer spending on services continues to drive back toward a normal level, spending on goods is picking up momentum. This directly leads to more freight, especially with money being spent on larger items, such as furniture, which take more room in a trailer.”
Tender rejections have been gently decreasing since the February storms, with the national Outbound Tender Rejection Index (OTRI) currently at 24.5%. The Outbound Tender Volume Index (OTVI) sits at 15,356, slightly down month over month.
New Driver-Shortage Effect Coming This Summer
The beginning of produce season will not help with capacity issues. Nor will the driver shortage, which has been dogging the supply chain for quite some time.
As summer approaches, people are setting out for post-pandemic vacations for the first time in more than a year, and the driver shortage is expected to have yet another effect on the U.S. economy: The American public is going to have a hard time finding gas.
“Not that there’s a looming shortage of crude oil or gasoline,” Chris Isidore writes for CNN Business. “Rather, it’s the tanker truck drivers needed to deliver the gas to stations who are in short supply. According to the National Tank Truck Carriers, the industry’s trade group, somewhere between 20% to 25% of tank trucks in the fleet are parked heading into this summer due to a paucity of qualified drivers. At this point in 2019, only 10% of trucks were sitting idle for that reason.”
As we’ve discussed in Transfix Take for months, pandemic-related driving school shutdowns and capacity limits, as well as the January 2020 federal clearinghouse that identified truck drivers with drug/alcohol violations or other issues and took some 40,000–60,000 of them off the road, have led to a persistent shortage of drivers. Additionally, driving a tanker truck is strenuous work that requires special certification, including a commercial driver’s license and weeks of training after being hired.
Jeff Lenard, a spokesperson for the National Association of Convenience Stores, told CNN his members are worried about what the driver shortage will mean for their deliveries, especially with demand for gas already back up to 97% of where it was at this time in 2019.
“But even if only a few stations run out of gas, that could spark a run on gasoline, as drivers will start topping off their tanks to avoid running dry down the road,” Tom Kloza, chief oil analyst for the Oil Price Information Service, told CNN. “Imagine the hoarding with toilet paper and topping off of gas tanks that we see after hurricanes, and you can see what might happen.”
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.