Trucking spot rates finally reacted to falling tender rejections and came in modestly last week, though they’re still at very high levels all around the country. So far, this feels to us like a seasonal breather (end of September volumes are typically higher than in the beginning of the month) or a cooler period in between waves of imports and inventory restocking.
Industry channels checks confirm that the rates rally and capacity crunch are still very much on. Freight brokerages are scooping up carrier-facing operations staff as quickly as they can find them and national carriers are raising wages, particularly for long-haul or OTR drivers. The way both non-asset intermediaries and trucking carriers are managing their labor forces — in the middle of a pandemic when unemployment is unusually high — signals their belief that it will be some time before supply and demand in trucking markets rebalances.
We expect October to be a better indicator of the strength of the market. In 2018, October volumes finished the month higher than they started, while in 2019 volumes deteriorated throughout the month.
In the meantime, we expect import volumes and consumer retail demand to continue to support trucking as the industrial sector gradually improves.
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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.