The pandemic has turned many aspects of life upside down, and commercial transportation is no exception. What are the lessons learned from 2020 and will they carry over into 2021? We asked DAT’s team of industry analysts.
The freight market in the past year has been marked by exceptionally tight capacity caused by imbalanced carrier networks, which pushed an historically high number of shipments over to the spot market. That placed a great deal of pressure on contract rates, but there are signs that the pressure is releasing.
The complications COVID-19 created for supply chains could be felt across all aspects of life in 2020, whether you were in the freight industry or shopping for groceries in a store with bare shelves. The public at large became much more aware of the types of problems that trucking and logistics professionals have been solving for decades.
“While the distribution efforts will not impact the majority of the industry, preparation for the post-pandemic world has both demand and supply implications,” according to the December’s Signal Pulse Report from DAT iQ.
It’s no secret that truckload rates have been hot, and prices are still exceptionally high. But for shippers, there are signs that some of that pressure is releasing, according to the recently released Pulse Signal Report for November.
Uncertainty abounds as we begin to look forward to the New Year. As we have seen in 2020, freight patterns and rate levels can shift suddenly, so it pays to have a strong awareness of factors that can affect the marketplace when bidding on future freight.
As we move into the fall, the truckload market is still seeing record-high spot rates. Total volumes were only up 1.6% in September compared to September 2019, but network imbalances continue to push shipments into the spot market and place pressure on pricing.
Annual bids are exceptionally important to shippers to set their plans and budgets, but all too often they are poorly executed and create problems for both shippers and carriers that persist throughout the year.