Has truckload rates peaked until the holidays?
Load volumes are still extremely strong, but week-over-week gains have been declining. This could be a sign that growth in tender load volumes may have peaked until the normal seasonal surge in holiday traffic later in the fourth quarter.
The truckload market remains historically strong, though. Fourteen out of the 15 freight markets the Freight Intel Group monitors, showed week-over-week increases in tender load volumes. The only exception was Laredo, Texas, which declined slightly by less than one percentage point.
Truck capacity is still extremely tight as well, tender rejections have plateaued and fallen from 26.68% to 24.59%. This is still an extremely high tender rejection rate. With spot market rates at a lofty $2.95 per mile on a national basis, shippers are likely exploring other options and raising rates on lanes where tender rejections are the highest.
Intermodal rates are on the move as well
Retail inventories down 11% year-over-year, while retail sales are up 12% year-over-year. It should come as no surprise that West Coast port traffic is hot. This has pushed up intermodal rates from the West Coast by 58% since June.
Air cargo companies are adding capacity as fast as they can
According to weekly Bank of America credit and debit card transactions, the strongest consumer spending categories during this pandemic continues to be e-commerce and electronics. Both are core categories for air cargo and are expected to strengthen as product launch season and the holidays are fast approaching.
With most international air passenger flights still operating at a small fraction of its normal volume, air cargo companies are busy building capacity. Companies adding freighter services from Asia include FedEx, CargoLux, and DB Schenker. While this new capacity should alleviate some of the air capacity issues, many market experts believe that it is more like treading water than pulling ahead of demand.
Articles to keep you on top of the freight market:
Truckers, law enforcement unite for Special Olympics convoys
FedEx expands coverage for last-mile heavy-goods deliveries
Borderlands: Mexican rail blockade costing millions; Toyota, VW expanding in Mexico
