TLI's Weekly State of Transportation Update
Week of March 15, 2021
With end of month/end of quarter quickly approaching, we encourage all of our clients to attempt to get as many shipments out prior to the upcoming rush since missed pickups, shipment delays, and capacity issues will only be exacerbated following the extremely challenging market & weather conditions we are currently experiencing.
LTL Weekly Summary:
The winter weather events which took place over the weekend in the Western US provided near-record snow fall levels to several areas, including CO, MT, and WY. Severely affected areas saw LTL carrier terminals continuing to be closed into the start of this week, creating further backlogs in local and cross-country shipments.
Unprecedented capacity issues are occurring across all major LTL carrier networks and are only expected to worsen in the coming months, as carriers continue to face challenges from the pandemic and booming demand from shippers. Carriers continue to attempt to rebuild their on-time service levels by opening new terminals, hiring drivers, and adding equipment to their fleets. Some carriers reported adding as much as 15% capacity to their fleets in early 2021 but are still struggling to keep up with the demand for their services.
LTL Carriers are asking that customers please be patient and understand the extreme challenges they are currently facing, warning that many terminals just cannot keep up with daily demand for pickups and deliveries and to expect delays of 1-3 days on average.
Truckload & Intermodal Weekly Summary:
Truckload spot rates in the dry van sector increased 16% over the past 30 days and are up 54% Y/Y as the severe February weather tightened capacity and created demand backlogs. Spot rates for both truckload and intermodal services are also extremely volatile and especially difficult to quote out into the future, as everyone is competing for the same trucks. Inbound raw material shortages have created backorders and forced many shippers to secure last minute outbound truck capacity through the spot market the moment finished good become available to ship.
International Weekly Summary:
International imports continue to create severe frustration for shippers, as booking availability is extremely scarce and often weeks out from the request date. Transit time delays and port congestion are only worsening the situation, as total lead times have hit record levels. Ocean freight rates from Asia to the US West Coast are +190% Y/Y, causing shippers to pay record high prices for record low service levels.
These ocean import delays have forced many shippers to result to record high air freight rates in order to bring desperately needed import goods to their facilities in a timely manner. Air freight rates are up 70-145% Y/Y depending on the lane, as shippers compete with the distribution of vaccines for aircraft space.
It is critical, more than ever, that you provide your TLI team with as much notice and flexibility as possible on any freight you may need to move in order to allow us to book the best carrier option at the best rate.
Providing our operations team with a MABD (must arrive by date) will allow them to secure the most cost-effective option for each shipment.
Please contact your Translogistics team at 610-280-3210 for any further questions.
*article written by Peter Rio, Director of Logistics, Translogistics. Any questions, please do not hesitate to reach out!
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