TLI's Weekly State of Transportation Update
Week of April 26, 2021
Rising freight costs are inevitable across all modes of transportation in a time where inbound raw materials are hard to come by and outbound finished goods are backordered and in high demand.
LTL Weekly Summary:
It seems like long ago it was January 2020 and LTL carriers were averaging on-time delivery service around 85% on-time. As we head into the last week of April 2021, LTL carrier on-time delivery performance continues to average only 60%, a level that often causes multi-day shipment delays and great frustration for shippers.
LTL carriers continue to attempt to add capacity along with terminal door space but struggle with staffing issues across the board. Daily, many carrier terminals are still maxing out with the number of pickups they can physically make, causing them to have to push freight to subsequent days, sometimes not even the following but multiple days out. LTL on-time pickup performance has dropped below 90%, a decade low number.
LTL carrier rate increases continue to average 7-10% year over year during annual renegotiations.
Truckload Weekly Summary:
After March where both spot van and reefer rates set new all-time record highs, the truckload and intermodal markets remain tight as we prepare to enter both spring produce and building seasons. Spot flatbed truckload rates and load-to-truck ratios are at their highest points since the mid-2018 capacity crisis.
Limited truck availability continues to drive average rate per miles up, forcing shippers to be flexible with pickup dates and better communicate with their clients regarding must-arrive-by-dates (MABD).
As carriers attempt to add trucks to their fleets, a global shortage of semiconductors and other components may delay production and delivery of heavy- and medium-duty trucks ordered in Q4 2020 until late 2021 or even early 2022.
International Weekly Summary:
Sharp rate increases on ocean shipping rates continue in April, as rates on many lanes remain over 3 times what they were just a year ago. Carriers collectively pushed up rates for April voyages and booking prices rose sharply following the Suez Canal disaster.
Many forwarders are commenting that “spot international rates are being driven up, and even longer-term or contracted rates are effectively worthless at this point no matter how much volume you ship”. Due to the limited booking availability, it’s critical that communication is strong between all involved parties, as available spots on vessels go quickly if not immediately confirmed. Shippers who like to “shop out” their international rates are regularly losing space on vessels as they wait for multiple quotes to be returned, since the rate and capacity environments are truly dynamic at this time.
More and more shippers continue to switch their routings to air freight, as the need for the inbound raw materials has simply become too urgent to wait for extended ocean transit times and global port delays.
TLI highly suggests that on all shipments you provide our team with the “Must Arrive by Date” (MABD) as to when you need the product delivered, which will help us select the proper routing at the best possible freight rate.
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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