December Freight Market Update

12/14/2021

December Freight Market Update

Stay up to date on the latest conditions impacting the freight market, curated by Trinity Logistics, through our Freightwaves Sonar subscription.

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HERE COMES ANOTHER SUPPLY CHAIN DISRUPTION?

The new Omicron variant has taken center stage, with cases first reported in African nations and now being seen in other countries including the U.S. What will the impact be to transportation, specifically the flow of goods to the U.S? That remains to be seen, but if the reaction from major U.S. suppliers, particularly China, is like what we have seen in the past, the expectation is further disruption to the flow of goods in the supply chain in the coming months. As you can see from Figure 1.1, once the start and stop of goods flow from Asia began this year with the onset of the Delta variant, combined with the mad rush for goods to restock America, rates for containers skyrocketed. Compared to what rates were for containers heading to either side of the U.S., rates are now three to four times higher.     

Figure 1.1

ELEVATED RATES TO CONTINUE INTO 2022

As we looked at previously, while shippers may feel a bit more secure in trucks showing up at their docks when they say they will as carriers went through a re-bidding of rates and are thus accepting freight tenders on a more consistent basis, the spot market rates continue to remain elevated as seen in Figure 1.2. Unfortunately, the continued favoring of goods versus services, combined with very little, if any, increase in capacity, will keep rates above the $3 per mile threshold at least into the first half of 2022.

Figure 1.2

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