Being a freight and analytics organization, we look for clues in data, especially as it relates to truckload capacity. When guaging the direction of commercial freight markets in 2021, there are some indicators that require extra scrutiny this year.
Truckload capacity is tight and expected to get tighter, but judging where truckload demand is headed remains challenging as COVID-19 headwinds ease and increasing tailwinds from the vaccine distribution and economic stimulus converge.
Something we’ve seen over the years is that extended periods of high freight rates tend to lead to higher numbers of new truck orders. We saw it in 2018, and new equipment orders again hit record levels in 2020. This time, the industry is faced with a lot more uncertainty.
We expect 2021 to be very different to 2020. The pandemic resulted in a crash in demand, followed by a capacity crunch, which will make year-over-year comparisons difficult. We don’t have any non-pandemic years in recent enough history to make meaningful comparisons.
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.
More capacity in the refrigerated sector is one possible outcome of the recent interim final rule published by the FMCSA, which clarifies agricultural commodity and livestock definitions in hours-of-service regulations.
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.