Dry Van Takes a Dip
For the past few weeks, freight trends were following closely to 2020. Surprisingly, dry van tender volume veered down off that path last week and started to look more like 2018–2019. Dry truckload volumes unexpectedly moved lower, as did tender rejections. Reefer truckload volume saw a significant and fast climb as Thanksgiving draws closer. Rates for both equipment types continued to climb, with reefer pulling ahead.
There are several possible explanations for the downward swerve in van trends:
- We are seeing a significant decrease in spot volume from the largest retailers. Many big-box stores prepared early for Q4’s freight market. The drop in volume may have been from the pull forward of freight through Q3.
- Contract rates saw a significant rise through the past three months, which correlates to the declining volume of tenders being rejected. Shippers likely took the past few months to reprice contract freight that was being rejected and looked at buying excess capacity at higher contract rates to avoid the spot market.
- Intermodal networks are improving and pushing for more volume to move inland from the West Coast. After months of cleaning up their terminals and seeing more inland drayage capacity, they are pushing shippers to move back to rail from truckload. As a result, after hitting all-time highs, rail rates are now declining to capture more capacity.
Coast-to-Coast Wrap-Up
On the West Coast, shippers are competing for capacity, and rates favor carriers, leading to continually rising rates. While the ports of Los Angeles and Long Beach are trying different things to move arriving goods, imports are still coming in at “deluge” proportions. The ports reached yet another record last week, with 111 container ships in the port complex, including an all-time-high 81 vessels at anchor, according to the Marine Exchange of Southern California, as reported in JOC.com. An additional 30 container ships were at berth being worked.
Throughout the rest of the country, we have not witnessed any more significant shifts. The Southeast, Midwest, Northeast and South, as well as ports on the East Coast, including Charleston and Virginia, are seeing additional volume decreases. Even with lower volumes week over week, we expect this to change heading closer to the holidays, when the traditional capacity crunch will take over.
The movement of freight is changing in every mode, as shippers do their best to keep up with record demand while fighting congestion at multiple points throughout the supply chain. Shippers who think forward, use data and think outside the proverbial box on solutions, while partnering with companies such as Transfix, will come out of this ongoing freight rally in a better position and well ahead of competitors. The one huge win through this pandemic has been speeding up the digital transformation of the transportation industry.
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.
This communication may contain certain forward-looking statements that are not statements of historical facts. All such statements are based on current expectations as well as estimates and assumptions that, although believed to be reasonable, are inherently uncertain. These statements involve numerous risks and uncertainties, and actual results may differ materially from those expressed in any forward-looking statements. We undertake no obligation to update or revise any of the forward-looking statements contained herein, whether as a result of new information, future events, or otherwise.
