Import shipments into Los Angeles and contacted truckload tenders out of Los Angeles are both surging, which is soaking up trucking capacity and tightening the Dallas market. Over the past week, the outbound tender rejection rate in Dallas jumped higher from 21.5% to 25.9% yesterday.
We believe West Coast import strength and generally elevated truckload demand will continue, that trucking capacity shows no signs of loosening, and that rates will continue to move higher. Last week, average Truckstop.com spot rates were flat after a softer volume and looser capacity environment, but we expect those rates to continue trending positively now that markets are tightening again.
Expect another round of higher tender rejections and higher rates out of Atlanta and Chicago in the coming weeks if Los Angeles and Dallas maintain their momentum. There’s a finite amount of trucking capacity, and when it shifts to a specific region to cover a surplus of freight, pockets of tightness develop elsewhere.
Absent an economic shock and assuming an appropriate level of economic stimulus and relief from the U.S. Congress, we believe that trucking markets are currently in a fundamental inflationary cycle that could take a year to play out. It will take that long for new capacity to enter the market, be efficiently deployed into the market, and bring spot rates back down.
You have selected content that's only available to members of FreightWaves Passport. As a member, you gain immediate access to the most in-depth and informative freight research available. It's your gateway to continuing education.
Members also get:
Access to exclusive community dedicated to discussing the most important challenges facing freight.
Monthly and Quarterly Freight Market reports keeping you informed of industry trends.
Much, much more!
Click below to learn more and sign up today!
Existing Passport subscribers may log in using the form below.
John Paul conducts research on multimodal freight markets and holds a Ph.D. in English literature from the University of Michigan. Prior to building a research team at FreightWaves, JP spent two years on the editorial side covering trucking markets, freight brokerage, and M&A.