Historically, increased spot market activity signaled higher overall truckload demand and tighter capacity. This year we’re seeing something of a paradox, with total freight volumes very uneven at the market, commodity and lane levels.
Late last week the Advocates for Highway and Auto Safety, the International Brotherhood of Teamsters, Parents Against Tired Truckers (PATT) and Citizens for Reliable and Safe Highways (CRASH) filed a petition with the United States Court of Appeals for the District of Columbia Circuit seeking to invalidate proposed HoS rule changes
As we reach the five-month mark of the pandemic, the freight market has yet to reach any semblance of equilibrium – capacity is tightening, spot market rates and volume are still climbing, and carrier networks are still out of balance.
With freight markets already upended by COVID-19, supply chains are in a precarious position heading into hurricane season. Further complicating matters: This season is expected to be an especially active one.
While there’s evidence emerging that truckload volumes may be stabilizing, the direction of spot rates remains uncertain, with upward pressure on prices as carriers continue to reject surge volume from shippers on their contracted lanes.
Several key factors cloud the current freight outlook: The possible end of the extended unemployment insurance program next week, COVID-19 outbreaks in many states, uncertainty in consumer demand and rising retail warehouse inventories. The latter is one to watch if the economic recovery slows.
The third week of July is normally the busiest for summer vacationers, and seasonal retailers rely on them. But with travel restrictions on some international and interstate travel, some businesses that depend on tourism during the short summer retail season are seeing revenues down as much as 90%, year over year. This means a lot less retail freight along with fewer truckloads of food and beverages.