Reefer capacity remains tight, volumes are strong and spot rates are very high. In fact, at $3.29/mile including fuel, national average reefer spot rates on Truckstop.com’s load boards have not yet retreated from their YTD high. Midwest to the East Coast lanes have the most momentum and may continue
Carriers are still exercising optionality and charging a premium to drive into backhaul markets.
All signals are flashing green for truckload carriers. Growing revenue per driver per week and falling empty-mile percentages pushed operating ratios down, giving carriers more confidence to purchase new and used equipment. In most lanes in the country, carriers hold pricing power and will be able to increase contract
Expect volatility to the upside in Q4.
The pricing accuracy of any given lane is based on its daily load volumes. In financial jargon, volume is referred to as liquidity. The more volume, the less friction in buying and selling, the more liquid a transaction becomes. Stocks traded on the New York Stock Exchange (NYSE) are one
Global trade as a percentage of global GDP peaked in 2006 for a variety of reasons. Geopolitical tensions are creating more friction in global trade, while automation is smoothing out the labor cost arbitrages that shifted manufacturing from the U.S. to Asia in the 1980s and ’90s. Meanwhile, more
Shippers, especially retailers, are giving ground on price to secure capacity for what promises to be an unpredictable Q4.
Rates pulled back by 1.3% w/w, but moves by brokerages and carriers indicate they think the rally has legs.
Tender rejections have fallen for a week, but that doesn't mean that rates will.
Although driver hours of service (HOS) is now firmly sewn into the trucking industry, it was a subject of contention in the months leading up to the electronic logging device (ELD) mandate in late 2017. U.S. trucking fleets were mandated to install ELDs as gatekeepers to monitor cab activity
The reefer market is following the dry van market, broadly speaking, and setting new highs in tendered loads, tender rejections and spot rates. The average reefer spot rate on Truckstop.com’s load boards rose to $3.33/mile last week, the highest rate in several years. Reefer capacity is tighter now than
It’s official: Freight brokers have officially lost control of truckload spot rates. One of the most commonly cited benchmarks in the freight brokerage industry is the important, dense and liquid Chicago to Atlanta lane, which most brokers worth their salt can quote in their sleep. Long suppressed by carrier density
Everything is in place for a face-ripping rally in Q4.
The business environment for asset-based trucking carriers continues to improve: Empty mile percentages are lower and revenue per driver per week is up. There are headwinds blowing against asset operators, though: The rack-to-retail diesel fuel spread is no longer doing much work on the carriers’ income statements, and operating expenses
Relationships between shippers and transportation providers are being reshuffled.
Los Angeles and Dallas are driving the national market.
Reefer markets took a leg up in August, supported by fundamentally strong demand, constrained capacity, and a renewed sense of confidence among carriers that now is the time to exercise pricing power. In spot markets, carriers are falling off loads, naming their price, and managing yield. 3PLs are giving
There's a routing guide shake-up happening right now.
Rejections and rates set to go higher from here on sustained shifts in consumer behavior.
In our view, COVID-related demand and capacity dislocations have touched off an upcycle in trucking markets supported by fundamentally constrained capacity. This week, a new batch of corporate earnings (UPS, WERN, USX, CHRW) helped us understand how transports experienced that volatility. In 2020, COVID-related volatility hit parcel carriers first
We don't think that capacity will loosen soon, but upward pressure on contract rates will take time.