Reducing freight market risk — Midday Market Update (with video)

Demand for warehouse space is increasing along with the need for reverse logistics services, with CBRE Inc. reporting a need to add 400 million square feet of space. 

Strickland gives an update on SONAR data and talks about tender rejection rates dropping back down to 25% after Thanksgiving. 

Anthony Smith reports the unemployment rate has dipped to 6.7%, with some slight positivity in warehousing and transportation. He believes employment opportunities in warehouses will be a space to “capture individuals who haven’t been able to go back to work,” because those industries will function despite pandemic-caused business restrictions. 

The divide between contract and spot markets

Strickland and Vincent bring on Kyle Lintner, principal and managing director at K-Ratio, to talk about the volatility of the freight markets. 

Lintner says that the way the freight market is set up with the option of contract rates or spot rates adds massive amounts of risk to the market for shippers and carriers.

“The flip-flopping back and forth is what keeps this thing volatile,” says Lintner. 

His advice for brokers moving into 2021 would be to find a balance between spot and contract rates to protect themselves as the market changes. 

Maritime market update with Greg Miller

FreightWaves Senior Editor Greg Miller comes on the show to discuss how the trans-Pacific market looks finishing out the year. 

With continued bottlenecks at the ports, Miller says maritime shipping rates and demand will see no change. 

Miller says, “2020 is in the bag, nothing is going to let up this year.” Shippers and carriers should expect the tight market to continue through the beginning of 2021. 

You can find more Midday Market Update recaps and recaps for all our live podcasts here.

More FreightWaves Podcasts