TLI's Weekly State of Transportation Update
Week of April 12, 2021
As we’ve entered well into April 2021, freight market conditions are proving to be the most challenging since the beginning of the pandemic. Capacity remains extremely tight in all modes and rates continue to rise.
LTL Weekly Summary:
LTL rate outlooks continue to suggest significant increases year over year, with the most current projections showing 9.4%, which are down slightly from 9.7% in the prior forecast. These sharp increases are caused by extremely tight capacity within LTL carrier networks, where most carriers have more than enough freight to fill their trucks each day. Carriers continue to be more specific about what type of freight they are even willing to pick up, focusing on improving yields on freight that is difficult to handle such as overlength material or poorly packaged shipments that are prone to damage.
On-time delivery levels continue to hover around the 50-60% mark accompanied by 1-2 day missed pickups becoming more prevalent in most markets. In the tightest freight markets, carriers often get maxed out with pickup availability early to midafternoon and are forced to bump all remaining pickup requests to the following day.
Truckload & Intermodal Weekly Summary:
Spot truckload rates have continued to skyrocket, with recent projections showing a 17% increase year over year. Even contracted truckload rates are projected to increase 12% due to tight carrier capacity and extremely strong demand from shippers.
As we enter into the spring building season, flatbed capacity has tightened greatly over the past few weeks and many markets have experienced significant rate hikes. The national average for flatbed rates rose to $2.49 per mile last week, which is $0.59 higher than the same week in 2020 (over a 30% increase).
As has been the case for quite some time now, shippers who find themselves having a lot of same day / next day truckload requests are seeing the largest increases currently due to the tight market capacity.
International Weekly Summary:
Disruptions caused by the Suez Canal closure are expected to have ripple effects on global supply chains through the end of the summer. Many vessel carriers are warning that things will only get worse over the coming months for supply chains worldwide.
International ocean shipping volumes remain extremely high, as shippers compete for limited available bookings on US imports. A record number of containers crossed the docks at the Port of Long Beach CA in March, showing that there will be no "slow season" this year for US Ports. The Long Beach port authority said its terminals handled 840,387 twenty-foot equivalent units (TEUs) in March, surpassing the previous record high of 815,885 set in December 2020. Long Beach CA imports were up 74% year over year. March is normally one of the slowest months for maritime trade volumes, which only further demonstrates that the current freight market conditions are unprecedented with no signs of slowing down.
Small Package Industry Note:
After the suspension of UPS’ Service Guarantee back on March 24, 2020 due to severe market conditions, the company announced that the Service Guarantee was reinstated on April 5, 2021 under the following limitations:
“Effective April 5, 2021 the UPS Service Guarantee will be reinstated only for UPS Next Day Air services (UPS Next Day Air® Early, UPS Next Day Air® and UPS Next Day Air Saver®) and UPS Worldwide Express services (UPS Worldwide Express NA1®, UPS Worldwide Express Plus®, UPS Worldwide Express®, UPS Worldwide Express Saver®, UPS Worldwide Saver, UPS Worldwide Express Freight® Midday and UPS Worldwide Express Freight®). Note: Until further notice, the guaranteed delivery time for UPS Next Day Air Saver® deliveries has been extended to end-of-day (11:59 p.m. on the guaranteed day of delivery). The Service Guarantee remains suspended for all other UPS shipments from any origin to any destination.”
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!
Translogistics' Industry Chart of the Week
Flatbed Market Conditions - Very Tight Capacity (source DAT)