Each week, Transfix shares our take on breaking news, resources, and insights into emerging market trends in the transportation industry.
Transfix Predicts Increased Freight Volume Through June
With all 50 states reopening their economy to some extent, and produce freight in full swing, Transfix expects markets to continue on an upward trend, as we enter a normal freight peak season.
“Produce season in 2020 has taken off, and we are seeing the full impact, especially in states such as Florida and California,” says Justin Maze, Transfix’s senior carrier account manager. “We’ve seen overall freight volumes increase across the country, but we have seen lower rates across nearly all markets due to the impact of COVID — though rates are rising in all produce-shipping-point states. We will continue to see higher carrier rates in produce-strong markets, since June is typically the peak month for produce movement.”
Resumption of operations in all 50 states will lead to freight volume increasing through June. Manufacturing has already started to pick up since the second half of May, and retail should pick up through June. This trend is clear in areas such as Detroit, where auto manufacturing started up again in mid-May, and as a result, volume has spiked.
“We also saw huge spikes in long-haul and rail volumes in May — increases that, most likely, will result in shippers needing to reposition their freight mix,” Maze says. “Consumer confidence was also on an upward swing in May, which means we could potentially see more consumer spending through June, as consumers and retailers try to make up for lost time.”
“As we move through June, which is traditionally a peak freight month, we will see overall freight volume increase, as long as we do not see a new surge in COVID-19 cases leading to another nationwide stay-at-home order,” Maze adds.
Our carrier network was specifically developed to provide flexibility in changing circumstances across the country, and we are ready to help shippers with increased freight volume in the coming months.
Outbound Tender Volumes Post Three-Year High; Tender Rejections Increase
Confirming Transfix’s positive June prediction, outbound tender volumes posted the highest June 5 total in three years, FreightWaves reports. Off a Memorial Day disruption, the OTVI is now 10,996, up 7% year over year.
Likewise, outbound tender rejections increased week over week for the fifth week in a row, after tumbling for the six weeks since the OTRI peak of 19.25% on March 28, FreightWaves Senior Research Analyst Seth Holm reports. “Capacity has tightened as volumes began to fill markets throughout May. Overall reefer rejections are up nearly 10% week over week.” This upward trend is just four weeks removed from the lowest point in OTRI’s history.
Dwell Times Declining, but Detention Still a Problem
“Truck driver detention times that soared in March may have dropped, as demand for essential goods eased in April and May, but carriers and shippers have not stopped searching for solutions to a problem that cuts into available capacity and frustrates truck drivers,” reports William B. Cassidy on JOC.com.
The data differs state by state. In California, for example, “a decline in dwell time has diminished over time. Statewide average dwell times dropped significantly through May 9, when they were 21.4% below the two-week rolling average, but dwell time has been climbing since.” In some recently reopened states, increases in detention time may be the result of difficulties manufacturers or retailers of non-essential goods have had staffing docks and receiving orders.
Technology is likely to be the key to a long-term solution to driving dwell times and detention down, Cassidy writes. Transfix offers proprietary technology and expert analysis to help shippers continually minimize dwell times and detentions.
With the unreliable pace of US economic recovery, shippers need a partner that can help adapt capacity in uncertain times — no matter how long they remain. Our carrier network was specifically developed to provide flexibility in changing circumstances across the country.
The Transfix team will be monitoring COVID-19’s impact on rates and volume. As a company, Transfix 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.