Consumer spending tapered off this week, but the savings rate is so high, Americans have a war chest unlike in any recent period. And, inventories remain depleted across many segments, so the freight industry won’t feel the direct brunt of any shift back to services anytime soon.
Kevin Hill takes you through the ways to navigate different spot markets in order to make a sale on this episode of Put That Coffee Down.
Here’s a closer look at the difference between spot and contracted freight rates.
Volatility in trucking markets has prompted shippers to assess different ways of securing reliable capacity. For DG, that means more reliance on in-house transportation, but that’s certainly not the only option. Some retailers are looking to diversify their transportation partners to avoid delays and secure truck space. Others are debating streamlining their transportation needs by signing over their private fleets to logistics specialists.
If you look at the weekly Outbound Tender Volume Index (OTVI) map, you might think freight markets have reversed course and are retreating significantly. But this line of thinking is misguided. Tender volumes are coming down, but off an unnaturally high base. Volumes in most major markets remain above pre-storm levels.
The freight markets have reentered “chaos is business as usual” territory. All the major indices have been eerily calm since the winter storm disruption. Yearly comps are becoming more difficult given the panic buying that shot volumes and rejections up this time last year. Don’t let the weakening comps distract you, this market can’t get much better.
There are many variables converging that will keep upward pressure on spot rates and tender rejections for the coming weeks. Carriers will be able to squeeze extra cents per mile over the next couple of weeks. Assets will come back online sooner rather than later, but volumes are beginning to pick up both seasonally and due to a whipsaw effect from the storm.
Without much volatility in volumes and rejections over the past three weeks, freight markets have seemingly found their groove. The tune is akin to Berlin techno. To some, its pace is smooth and machine like. To others, its pure chaos.
This week’s DHL Supply Chain Pricing Power Index: 70 (Carriers) Last week’s DHL Supply Chain Pricing Power Index: 65 (Carriers) Three-month DHL Supply Chain Pricing Power Index Outlook: 75 (Carriers) The DHL Supply Chain Pricing Power Index uses the analytics and data in FreightWaves SONAR to analyze the market and estimate the negotiating power for […]
We may be seeing signs of a traditional January lull, but at a much higher level than years past. On a rejection-adjusted basis, tender volumes are running up 23% yoy versus 20% last week. Tender rejections continue to decline modestly, but carriers are still rejecting more than 1-in-5 contracted tenders. Stimulus can only carry the freight markets so long. Fortunately, the industrial economy is revving up and retailers have significant restocking ahead.
The Outbound Tender Reject Index has declined substantially since the beginning of the year. This shouldn’t be seen as a sign of a material capacity loosening, rather an effect of the ongoing rebid season pushing contract rates higher.
Cold chain distribution shifts following the pandemic along with a much smaller supply of available base capacity has made the reefer carrier a much more valuable commodity this year.
In the heat of peak holiday season, our thesis is largely the same: relatively tight capacity, strong volumes and positive cyclicality. The low inventory-to-sales ratio, strong consumer sentiment and spending, lack of service-based spending options and acceleration of e-commerce growth all bolster our belief.
In today’s edition of The Daily Dash, spot rates could be heading higher yet again. Plus, truckload carriers wonder if we are in peak season or a new normal; and a Texas group tackles tort reform.
Both truckload tenders and tender rejections rose this week. If spot rates are to continue the succinct but lagging dance with tender rejections, we should see spot rates inflate over the next two weeks. Also, with Thanksgiving just a week away, drivers will be seeking freight that drives them toward home, which typically pushes rejections and spot rates higher.
In today’s edition of The Daily Dash, volumes and rates take a step back; complete coverage of FreightWaves’ Cold Chain Summit; and CDL fraud.
This week’s DHL Supply Chain Pricing Power Index: 75 (Carriers) Last week’s DHL Supply Chain Pricing Power Index: 80 (Carriers) Three-month DHL Supply Chain Pricing Power Index Outlook: 75 (Carriers) The DHL Supply Chain Pricing Power Index uses the analytics and data in FreightWaves SONAR to analyze the market and estimate the negotiating power for […]
Trucking spot rates are averaging well over what they were a year ago implying many shippers will see rates increase next year. How much will it be?
Transparency is at the foundation of all excellent relationships. When there are grievances within the supply chain, an open line of communication and a commitment to more transparent, intentional dealings is the key to our collective success.
Shippers are willing to pay more to put freight on the rail just to get it moving out of Los Angeles.
