COVID-19 Market Impact (April 21st)

As a part of our on-going COVID-19 coverage, we’ll be providing breaking news, resources, and insight into the pandemic’s impact on the industry. 

Freight volume continues to decline nationally, but the severity of the drop-off has varied widely and in some cases, a few outbound markets reported week-over-week volume increases. According to FreightWaves Outbound Tender Volume Index (OTVI):

There are signs that the rate of decline is slowing as volumes have not fallen as quickly over the past week as they had previously from a week-over-week perspective. Some of the larger markets like Dallas and Harrisburg have had day-over-day increases, which will probably become the norm as shippers have intermittent surges in volumes. – Zach Strickland, FreightWaves’ Market Expert

Securing capacity may not be a pressing concern in the short term for most shippers, but that may change quickly. Even the nation’s largest carriers have raised grave concerns about longterm viability in the current economic climate and should a portion of carriers halt operations due to either health concerns or financial hardship, capacity issues could rear their head overnight. 

The cost of diesel is in freefall. Diesel fuel is currently at its lowest price point since February of 2016 and has been steadily declining week-over-week since mid-February. This downward trend will now be materially impacted by the oil futures market which plunged into negative territory on Monday. Crude oil’s collapse is linked directly to diesel prices because it accounts for 43% of what carriers pay at the pump. We will continue to monitor this situation closely and report back the fuel impact on carriers in the coming weeks. 

Justin Maze, a Senior Carrier Account Manager at Transfix, noted over the weekend that Midwest manufacturing is at it’s lowest levels since post-World War II. “If conditions continue like this or worsen, we anticipate a spike in small carriers going out of business in the Midwest.” One factor buoying carriers on the brink is diesel prices. The discord between OPEC and Russia combined with nationwide shelter-at-home orders virtually guarantees fuel prices to remain low for the foreseeable future.

As a digital freight broker, Transfix remains well-positioned to provide capacity during these turbulent times. Our carrier network was specifically developed to provide flexibility in tight circumstances such as those brought about by COVID-19.

The Transfix team remains committed to providing critical services to our customers during this crucial time. For more on COVID-19’s impact on the freight market, please refer to our website, blog, social channels and via email.