How market trends are toeing the line of expectations
The new year has been full of prognostications about freight market direction from all our FreightWaves podcasts hosts, and Luke Falasca and Kyle Taylor are here to analyze the validity of their predictions.
They both say “We told you so” about the predictions they made two weeks ago. Falasca says the observed decline in tender rejections loosened up some capacity and dropped spot rates, just like he said it would.
Taylor says carriers are in “a frenzy of how low can I push my rates down,” and this drop in rates is validation of the SONAR data presented in the previous episodes of #WithSONAR.
Falasca calls this a great time for carriers to lock in contract rates because to the shipper, it looks like a good move and for the carrier and broker, it still guarantees a good rate to profit off of.
Taylor says there will be a ripple effect of the market softening for carriers and shippers so companies will want to capitalize before rates plummet. Tender rejections are at 22% for the first time in six months, and Taylor believes this is imperative in forecasting the response from rates.
Taylor says his forecast for rates in the near future is dependent on government stimulus. He believes consumer spending will keep volumes consistent, and if that happens rates will continue to fall.
“I think rates will still have a long way to go,” he says but contracted freight entering the market will continue to soften rejections and the overall market.
You can find more #WithSONAR recaps and recaps for all our live podcasts here.