Stay up to date on the latest conditions impacting the freight market, curated by Trinity Logistics.
As expected, we saw the typical Memorial Day blip in volume recently. Some have indicated this decline in volume is a long-expected downward trend, but that is fool’s gold. We fully expect volumes to quickly trend back up as we get into the summer season. By comparison, even with the slight decrease, volumes remain 23-33 percent higher than in recent years (Figure 1.1). This volume trend will continue to keep spot rates elevated, now averaging just over $3.20 per mile, 70 percent higher YoY.
Capacity will continue to be strained, with one of every four tendered shipments rejected by carriers. Refrigerated shipments continue to be the most significant source of tender rejections, right around 40 percent, but flatbed rejections continue to inch upwards, now rejecting 27 percent of shipments tendered. Looking deeper at rejections, it is not just the equipment needed to move the freight that determines the rejection frequency but also the distance the shipment will travel. Local loads, anything less than 100 miles, tend to be the most favorable freight, with 92 percent of those shipment tenders being accepted (Figure 1.2). On the other end of the spectrum, “tweener” shipments (shipments 450-800 miles) are the most volatile, with one out of every three shipments being rejected. There are various reasons why shipments based on length of haul are more or less desirable. Shorter runs certainly afford a driver to be home each night, and typically those shipments are relatively frequent, so it becomes easily habit-forming for the carrier. On the other hand, those tweener shipments could be less appealing because they may not allow a carrier to get two or three full days of running, and those lost hours result in lost wages. Or the acceptance could simply be a product of asset positioning by carriers.
While many in the industry have seen more murkiness in their crystal balls than in years past, the outlook by many indicates carrier rates will continue to remain high, demand will outpace supply, and freight volumes will stay elevated through the rest of 2021. Several factors are leading many to share this outlook:
With cyber-attacks on the rise in the last few months, from the Colonial Pipeline to the Martha’s Vineyard Ferry and even law enforcement, businesses have even more of a reason to batten down the hatches of their systems. Security and stability are strategic initiatives for Trinity, and we are implementing further database upgrades and increasing the use case of multi-factor authentication on our internal systems.
We also know the importance of matching loads with qualified carriers quickly and efficiently. So we are improving carrier sourcing by enhancing our algorithms and expanding our data on carrier preferences. These enhancements will bring faster, smoother load matching for our shipper and carrier customers.
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Find out what you need to know in the freight market update of May 2022.
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