We’re entering recovery mode—what does that mean? You guessed it, rate volumes are close to bursting all around the country. In fact, transportation rates are close to all-time highs, and trucking capacity has been harder and harder to secure with the outbound tender rejection index at above 25%. In light of all this, FreightWaves Research surveyed shippers to find out their expectations regarding rates, capacity, and freight volumes for the next few months. One thing we can say for certain is that now, more than ever, both shippers and carriers need to focus on creating a stable and profitable business, that won’t be shaken up by freight market fluctuations. Read on for the biggest takeaway from these survey results.
Trucking capacity will not loosen in 2021
As of this writing, 74% of respondents of the FreightWaves survey believe that trucking capacity will remain tight through Q2 and SemiCab agrees. In fact, we predict that capacity will likely worsen in Q2, even spilling over into Q3. Of course, trying to predict long term is almost impossible right now, but it is easy to see that these short term conditions will be difficult to navigate in the market. We’ve seen large orders for 'new trucks'—so when will we see that relieving capacity constraints, and how will it impact small and mid-size carriers?
A telling sign of this tightening capacity can be seen in West Coast container import volumes. Thus far, volumes have increased by 60% year over year in March, a record-breaking amount. This is of particular importance as March is typically one of the slowest months in shipping. This year is obviously different as the economy slowly opens up with more and more COVID-19 restrictions being lifted. Gene Seroka, Executive Director in the port of Los Angeles stated that shipment levels are higher than they have been in the past 113 years.
What does it mean?
These factors are going to lead to an increase in over the road (OTR) volumes, which means even more challenging capacity constraints and higher rates. Trucking capacity challenges in the freight arena aren’t new, but that doesn’t mean they aren’t disruptive. That’s why we believe it’s important to embrace technology solutions to help lower the impact supply and demand fluctuations have on one’s bottom line. With a Collaborative Transportation Platform like SemiCab, shippers and carriers gain access to optimized, aggregate demand and supply. This creates efficient capacity with lower empty miles.
For more information on what a Collaborative Transportation Platform does, or for a breakdown of the many different digital freight networks out there, download this Gartner report. Better yet, reach out to us and we’ll be able to answer any questions you may have, and get you up and running on our platform.