Transfix Take Podcast | Ep. 37 (Week of Feb. 9)
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Snow and Flowers in February
Winter weather continues to disturb and displace truckload markets throughout the U.S. February kicked off with a large portion of the country recovering from a blizzard. Luckily, most of the impacts of the storm were during the weekend, which limited the overall effect on truckload capacity.
Did the past week or two give you a sense of déjà vu? We are just a year from the February Freeze of 2021, when arctic temperatures hit southern states for an extended period, causing chaos for transportation from truck to rail. We geared up again last week for a winter storm sweeping across the country, bringing dangerous conditions from Texas to the Northeast. Though the storm was not as significant as the one in 2021, we saw similar supply chain disruptions and market shifts that started to put more pressure on shippers.
Last week brought the effects from displaced capacity and facility closures. Unfortunately, just as the Midwest was easing for shippers, markets took a U-turn. Weather shut down operations for not only carriers but even some large shippers stretching from Oklahoma to Ohio. Additionally, the Northeast, Texas and parts of the South essentially closed down for 24 hours due to significant ice issues that made it dangerous to operate. The disruption pushed up tender rejections and rates on freight originating in and heading to these markets. The storm’s impact has been felt through the beginning of this week, as shippers and carriers have been dealing with a backlog of freight that needs to be moved.
On the West Coast, shippers continue to enjoy looser truck capacity. After weeks of easing, we are starting to see a potential bottoming out, with rates beginning to stagnate. This could be from weather issues in the South and Midwest having a domino effect across the country, similar to last year’s weather impacts.
As we approach Valentine’s day, markets in the Southeast and along the Texas/Mexico border likely will start to heat up, with the demand for flowers influencing outbound volume. The bulk of Valentine’s flowers come from Colombia and Ecuador and make their way into the U.S. via southern Florida or the Texas/Mexico border. Shippers are continuing to compete for capacity in these markets during the first half of this week.
In the past few weeks, shippers saw capacity start to ease in their favor, while carriers lost some power on pricing — but they could still keep rates relatively high with a potential backlog of freight.
Seasonally Adjusted Truck-Job Numbers Surpass Pre-Pandemic Levels
The Bureau of Labor Statistics reported that truck transportation jobs rose by 7,500 in January on a seasonally adjusted (SA) basis. SA jobs have now recovered enough during the past two months that employment in the sector has surpassed its all-time high — higher than pre-pandemic numbers — according to FreightWaves.
However, this is not the case based on a not seasonally adjusted basis. “Economists generally look at seasonally adjusted data as more meaningful, but many caution that the figures for not seasonally adjusted jobs should not be ignored,” John Kingston writes for FreightWaves. “January jobs on a not seasonally adjusted basis in January were down to 1,534,200 jobs, which marks a decline of 12,000 jobs from December and a whopping 16,800 jobs since November.”
SA numbers for other key transportation sectors, including couriers and messengers, as well as warehousing and storage jobs, also rose significantly.
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.
