Happy New Year from everyone at Transfix! We are deeply grateful to all our partners and customers who worked with us to persevere through the craziness of 2020. Now, what will 2021 look like?
“The road forward in 2021 remains difficult to forecast, but we can make solid assumptions for the short term,” Justin Maze, Transfix’s senior manager of carrier account management, says. “January should exhibit a much stronger than ‘normal’ January trend, with tender rejections, volumes and rates all remaining relatively high. Additionally, many large shippers will continue to adjust their inventory levels.”
Trans-Pacific shipping rates hit an all-time high, and rates jumped on Asia–East Coast routes, as well, in late December, along with surging demand for ocean freight. “The stage appears set for continued ultra-high rates in January,” Greg Miller reports for FreightWaves/American Shipper. These shipments will need to be moved throughout the country, necessitating increased capacity and creative solutions.
Ongoing issues remain
The trucking industry still faces an ongoing and worsening labor shortage that began even before the pandemic hit. “For the fourth consecutive year, the driver shortage was the top industry issue overall on the American Transportation Research Institute’s Top Industry Issues list,” Cristina Commendatore writes for FleetOwner. “And this year, the driver shortage is expected to be even worse due to a pandemic-induced closure of driver training schools and commercial driver license testing sites. The driver-shortage problem has also been compounded by stricter drug and alcohol testing mandates, an older demographic of drivers retiring from the industry, and the fact that women and minorities still represent a small fraction of the driving force.”
On the positive side, Dan Ronan of Transport Topics reports, truck sales finished 2020 on an upbeat note, and analysts are optimistic sales will remain steady into the new year, as freight volumes have remained steady during the pandemic thus far. Additionally, truck drivers started seeing pay increases during the second half of 2020 as a way to deal with the increased demand for their services. These trends are likely to continue well into 2021.
What’s next?
“This coming week will start off loose, as capacity re-enters the market coming off a long holiday break, but this could also lead to a few days of capacity displacement, which is when capacity is still out of rhythm and adjusting itself across all markets. This may create a day or two of tightness,” Maze says. “January and February could be telltale signs of where rates will sit through 2021, as we work toward fixing ongoing issues, such as the driver shortage, and deal with the COVID-19 crisis.”
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.