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Weekly Market Brief

August 4, 2020

The big news this week is twofold. First is the arrival of tropical storm Isaias, (a name only The Weather Channel announcers can pronounce) which is now officially a hurricane. Some of the heaviest freight volume this week is along the East Coast corridor, directly in the storm's path, so expect possible delays and disruptions due to high winds, excessive rainfall and flash flooding. 

 

Also of note this week is the amount of freight volume in the market. Capacity is tightening with outbound tender rejection rates hitting an all-time high for 2020. Talk about a volatile market! Just five months ago in March we saw historically low truck rates and now, rates are hitting historical highs (see the DHL Power Pricing Index below). The third quarter is traditionally a time of slow down in the market, but this year we have seen a long and steady rise. 

 

Weekly market updates help you identify areas where freight capacity is tight as well as areas that are loose and easier to cover. This helps you better understand the market and provides a basis for your pricing.

 

Spot Market Rates & Volume  

Below is a graph showing a weekly view of the month-to-date national average spot rates from DAT. 

Overall Spot load posts (July 27-Aug 2) are up 8.6% from last week, up 14.6% from last month, and up 75.6% year over year.

Dry van: Load-to-truck ratio is up 110.3% from 2019.

Dry Van Spot Rates: Rates are up 4% from last week, up 12.4% from last month, and up 10.5% year over year

Reefer: Load-to-Truck ratio is up 28.9% from last week, up 34.8% from last month, and up 102.1%  year over year. 

Reefer Spot Rates: Rates are up by 2.2% from last week, up 6.7% from last month, and up 5.1% year over year.  

Fuel prices have dropped 0.4%  

spot ratesAUG4

Who's Got the Power?

The pricing power index is a weekly gauge of who has more sway in negotiations when it comes to pricing and freight rates. The farther the needle leans to the left of the gauge, the more power the shipper has in negotiation. The farther to the right, the carrier has the upper hand. The image below shows the most recent pricing power gauge from August 3, 2020 and as you can see, it has increased another 5 points from last week. In March of this year, it was in the 15-20 range!

dhl-pricing-8-3

 

Outbound Tender Volume & Rejection Rates 

The graphs below shows the last six months of outbound tender volume and the last year of outbound rejection rates for the United States. The data is compiled from the heaviest shippers in the contract market.The blue line indicates 2020, the green 2019, and the orange 2018. There continues to be more freight than usual this time of year with much of the contract freight spilling into the spot markets. We have now surpassed the heaviest volume surges in March when we experienced the panic-buying at the onset of the pandemic. Outbound tender rejections are at a record high for the year at 20.31 versus two weeks ago at 16.56.

(Graphs below courtesy of Sonar/Freightwaves)

 

OTVI 8 4 2020

 

OTRI 8 4 2020

Capacity This Week

Dark red areas (hot spots!) on the map show where capacity is tightening. Rates in these areas will be higher than in blue areas of the map where capacity is loose. As an example, reefer freight is experiencing heavy volume along the East Coast. Also areas of Southern California, Texas and the Midwest are showing tight capacity. The dry van market is also seeing capacity restraints in Southern California from the ports. Expect to pay more for freight coming out of Columbus, Ohio where there is a major hub for air cargo distribution right now, putting upward pressure on rates in those areas.

Note: Top Map is reefer capacity, bottom map is dry van. (Maps courtesy of DAT Market Conditions)

Capacity Map reefer 8 4 2020

 

Capacity Map van 8 4 2020

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Produce Market Updates

The Mid-Atlantic states are hot with produce while Southern California continues to experience tight capacity.

 

East Coast: Virginia, and Maryland's Eastern Shore are in full swing right now, showing heavy volumes. Hurricane Isaias is bound to have an impact on travel today with winds up to 70 mph in some areas. 

Midwest: Indiana melons going strong! 

California: Rates are still spiking, much higher than usual volume this time of year due to port activity. Any produce coming out of this area will cost more to ship because of tightened capacity.

Texas: Short lead times and high rates coming out of Texas right now.

New Mexico: Onions still shipping strong out of New Mexico with an expected shift to Utah after that.

 

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Weekly Market Brief

July 28, 2020

This week's freight market is reaffirming what we already know from the last several months--this is no typical year in the supply chain. Historically speaking, mid-July is the month we should start seeing volumes drop with pricing following  like a faithful canine. But with this year's upset due to the pandemic, volumes are still holding strong in many areas, and what comes next is anybody's guess. 

 

California has remained a strong market over the last month, and this week we are seeing spikes in both the Ontario and Sacramento where there is extremely tight truck capacity. Other markets showing capacity issues this week are Harrisburg and Allentown, Pennsylvania. Both of these markets are in the top five highest increases in the country, week-over-week, for tender rejection rates. Also of note is the Denver market, which is exhibiting some of the most rapidly softening conditions.

 

Weekly market updates help you identify areas where freight capacity is tight as well as areas that are loose and easier to cover. This helps you better understand the market and provides a basis for your pricing.

Spot Market Rates & Volume  

Below is a graph showing a weekly view of the month-to-date national average spot rates from DAT. 

Spot load posts (July 20-26) are down 3% from last week, but are up 82% when comparing the month of June from May. 

_________________________________________

Date Range: July 20-26 versus July 13-19

Dry Van: Load-to-Truck ratio was down 3.8% versus 4.9% down from the week prior

Dry Van Spot Rates: surprisingly, rates are up 2.5% versus a 4% increase last week from the prior week

Reefer: Load-to-Truck ratio is down 7.9% versus 1.3% down from the prior week

Reefer Spot Rates: Rates are up by 0.6% this week versus up by 2.3% from the prior week

Fuel prices have dropped 0.2% from last week. 

spot rates7-27

Who's Got the Power?

The pricing power index is a weekly gauge of who has more sway in negotiations when it comes to pricing and freight rates. The farther the needle leans to the left of the gauge, the more power the shipper has in negotiation. The farther to the right, the carrier has the upper hand. The image below shows the most recent pricing power gauge from July 24, 2020 and as you can see, it has pushed even further  toward the carrier side compared to the week before.  

dhl-pricing-7-24

Outbound Tender Volume & Rejection Rates 

The graphs below shows the last six months of outbound tender volume and the last year of outbound rejection rates for the United States. The data is compiled from the heaviest shippers in the contract market.The blue line indicates 2020, the green 2019, and the orange 2018. There continues to be more freight than is typical this time of year with much of the contract freight spilling into the spot markets. Outbound tender rejection are slightly higher at 17.87 versus last week at 16.56.

(Graphs below courtesy of Sonar/Freightwaves)

OTVI YTD July 28 2020

OTRI YTD July 28 2020

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Capacity This Week

Dark red areas (hot spots!) on the map show where capacity is tightening. Rates in these areas will be higher than in blue areas of the map where capacity is loose. As an example, reefer freight is experiencing heavy volume along the North Carolina, Virginia coastal areas (and the map doesn't show it but we are experiencing heavier volume on Maryland's Eastern Shore too). Also areas of Utah and western Colorado are showing tight capacity. The dry van market is seeing capacity restraints in  parts of Missouri and southern Illinois as well as lower Arkansas, putting upward pressure on rates in those areas.

Note: Top Map is reefer capacity, bottom map is dry van. (Maps courtesy of DAT.)

Capacity Map Reefer 7 28

 

Capacity Map Dry van 7 28

Produce Market Updates

It is an unpredictable market with new COVID-19 spikes in prime produce shipping states, but this is what we are seeing this week. 

East Coast: North Carolina, Virginia, and Maryland's Eastern Shore are in full swing right now, showing heavy volumes.

Northeast: Rates are fluctuating with capacity up and down daily. 

Midwest: Melons coming out of Indiana should be starting up soon.

California: Rates are still spiking, much higher than usual volume this time of year.

Texas: Plenty of freight still coming out of Texas with moderate rates in some areas.

 

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Weekly Market Brief

July 21, 2020

Now that DOT week is behind us and some produce areas are slowing down, capacity has loosened up. We are still experiencing heavy volume pockets around the country, such as California, (Los Angeles and Fresno in particular) and Texas,(Houston and Ft. Worth), while other places like Jacksonville, Florida and Savannah, GA are showing strong volume decreases. 

 

One of the factors we watch to evaluate the freight market is the manufacturing sector. A recent  Empire State Manufacturing Index survey shows that New York and Pennsylvania manufacturers have seen positive numbers for the first time since the start of the pandemic. (See graph below). Although it is not necessarily indicative of the whole country, it is a bit of good news in an uncertain economy.  

 

Weekly market updates help you identify areas where freight capacity is tight as well as areas that are loose and easier to cover. This helps you better understand the market and provides a basis for your pricing.

 

Empire State Manufacturing Index Survey

Empire State Manufacturing Survey_Index

 

Spot Market Rates & Volume  

Below is a graph showing a weekly view of the month-to-date national average spot rates from DAT. 

Spot load posts (July 13-19) are up in 22.5% from this week last year, but down 1.5% from the previous week. The big news here is that May 2020 to June 2020 posts reveal a significant increase of 82%.


Date Range: July 13 -19 versus July 6 - 12 

Dry Van: Load-to-Truck ratio was down 4.9% from the week prior

Dry Van Spot Rates: surprisingly, rates are up 4% from the prior week

Reefer: Load-to-truck ratio is 1.3% down from the prior week

Reefer Spot Rates: Rates are up by 2.3% from the prior week

There were no changes in fuel prices between the week of July 6 and the week of July 13.

 

spot ratesJULY21

 

Who's Got the Power?

The pricing power index is a weekly gauge of who has more sway in negotiations when it comes to pricing and freight rates. The farther the needle leans to the left of the gauge, the more power the shipper has in negotiation. The farther to the right, the carrier has the upper hand. The image below shows the most recent pricing power gauge from July 17, 2020 and as you can see, it has pushed another 10 points toward the carrier side compared to the week before.  

 

dhl-pricing-7-17

 

Outbound Tender Volume & Rejection Rates 

The graph below shows the last six months of outbound tender volume and rejection rates for the United States. The data is compiled from the heaviest shippers in the contract market.The blue line indicates 2020, the green 2019, and the orange 2018. There continues to be an ample supply of freight in the marketplace,15 to 20 percent higher year-over-year on the contract side. Outbound tender rejection rates are holding steady, similar to where they were last week, but slightly higher at 16.56.

(Graphs below courtesy of Sonar/Freightwaves)

 

July 20, 2020

 

OTRI July 20 2020

 

Capacity This Week

Dark red areas (hot spots!) on the map show where capacity is tightening. Rates in these areas will be higher than in blue areas of the map where capacity is loose. As an example, reefer freight is still tightening notably along the East Coast as produce works its way north. The dry van market is seeing heavier capacity restraints in many areas of the West and Southwest which is putting upward pressure on rates in those areas.

Note: Top Map is reefer capacity, bottom map is dry van. (Maps courtesy of DAT.)

 

Capacity map reefer 7 21

 

Capacity map Dry 7 21

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Produce Market Updates

It is an unpredictable market with new COVID-19 spikes in prime produce shipping states, but this is what we are seeing this week. 

Arkansas, Georgia, North Carolina: Shipping volume out of these southern states has significantly slowed.

Northern Alabama, East Tennessee, Eastern Maryland: Volumes are starting to heat up and expected to continue this week and next.  

Midwest: We expect to see the Midwest produce volumes starting soon.

California: Big spike in rates as melons and grapes are still shipping out this week.

Texas: Still strong carrier demand this week, especially Houston and Ft. Worth areas. 

 

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Weekly Market Brief

July 14, 2020

63,200 individuals in the United States tested positive for COVID-19 in a single day just last Thursday. That is a record. Since the rise in infections are mostly in southern states such as Texas, Georgia, Arizona, and Florida, panic-buying is returning and capacity is tightening in these areas. Adding even more stress to the market is this week's arrival of the annual DOT road inspections. Read the full report.

Weekly market updates help you identify areas where freight capacity is tight as well as areas that are loose and easier to cover. This helps you better understand the market and provides a basis for your pricing.

marketreport-unchart

Choptank Transport: Market Report Apr/May 2020

Like the famous words of Captain James T. Kirk, we are boldly going “where no man has gone before,” and I am not talking about the outermost regions of space. I am talking about right here on terra firma. Sure, we’ve had plagues and pandemics before, but never with the population, economy, and intricate network of transportation and travel that we have in the 21st century. It is a brave new world, alright, and we are scrambling to adapt and adopt.

Luckily, adversity is the mother of invention, and it is evident in the way we as humans are adapting to the global pandemic. Shippers who are lucky enough to be manufacturing are facing serious challenges, such as working with reduced staff, dealing with volatility in order patterns, finding a need for alternate sourcing, and navigating around unclear government regulations that differ from state to state. Despite the chaos, freight keeps moving, and shippers are finding new and sometimes better ways to get the job done.

Read the Market Report here.

Download Apr/May  Market Report

Choptank Transport Market Report: Q1 2020

Looking at the freight market in Q1 of 2020 is much like watching the new season of Ozark on Netflix; it first requires a brief look at what came before. My personal binge-watching policy dictates that before diving into a new season, I do a quick recap of the last two episodes to get the full impact of what is going on now.

So, let’s review what was happening in Q4 of 2019 in the freight industry. Everyone summed up the year by comparing it to the bull market of 2018, with slight resignation but hopefulness. The overriding sentiment was that even though the market in 2019 paled in comparison to the previous year, the industry was still experiencing growth, and we had 2020 to catch up. 

Read the full report ...

Download Logistics Market Report Q1 2020

 

Choptank Transport Market Report Q4 Year End

Record truck orders and record freight volumes in 2018 served as the backdrop for a significant correction to the market in 2019. The year began with a plethora of trucks and freight volumes underperforming expectations. It is estimated that there are approximately 75,000 more tractors available than there is freight to fill them.1 Shipments became easier to cover, and as a result, carrier rates were historically low. Even though economic growth continued in an upward trajectory, it was at a much slower pace than the previous year and not enough to compensate for the overabundance of equipment.

Read the full report ... 

Download Market Report Q4 Year End 2019

 

Choptank Transport Market Report Q3

The freight market is notorious for having a life of its own, but the difference between 2018 and 2019 was an eyebrow-raiser for sure. Industry experts say the 2018 spikes in volume were higher, and the declines more rapid, than ever before. In Q3, we saw what appears to be the beginning of a correction to the market, a good sign for the industry.

The beginning of Q3 initially looked dismal with loose capacity, tender rejection at an all-time low, and freight volume significantly down from last year. It was good news for shippers who were pleased with high tender acceptance rates. Finding trucks was easy, and pricing was significantly down from 2018.  On the flip side, less demand and not moving as much freight mean less business growth for shippers.

Read the full market report ...

Download Market Report Q2 2019

 

Choptank Market Report Q2 Update

The transportation market has been like a yo-yo over the last year and at the end of Q2 there are signs of an uptick in volume, but rates are still low and capacity is still good in most areas. Read our report to learn the latest. 

Read more ...

Download Market Report Q2 2019

Choptank Transport Market Report Q2

According to economists and supply chain experts, this year's freight market will be nothing like last year. The further we get into 2019, the more forecasters are adjusting their predictions for economic growth, expecting less than originally stated. 

Read more ...

 Current Market Report April May

Market Report Q1 2018

After coming down off the bull market of 2018 when unparalleled economic growth resulted in record-high rates and short capacity, January may have been a disappointment for some. Lower than last year's record success, the manufacturing sector is experiencing a steady 3% growth rate, year-over-year at present. That might sound disheartening, but keep in mind, this is the traditional “slow" time of the freight year and it is still growth. If you’re worried about our economy, take notice of other countries, like Europe, who are seeing a much more drastic decline in economic prosperity with Brexit looming and tariffs of their own to worry about. The truth is, the whole global economy is slowing down.  read more and download below!

JAN/FEB Market Report

Choptank Transport Market Report 2018 in Review

By Brian Fox  |  Dec 2018

A lot has happened in the world of transportation and logistics in 2018.  This could be a novel about all the things that happened in 2018 and the many predictions for 2019.  Above all of the headlines, though, we have lived through the strongest year for spot and contract pricing increases in the history of trucking in the U.S. 25% increases in the spot market rate, 30 percent in dry van and reefer, and spot market rate increases of over 25 percent in flatbed; which were followed by contract rate increases of over 15 percent in all three modes!  All that data could point to another turbulent and soaring market in 2019.  However, and lucky us, there is a mountain of data to dig into and the picture becomes clearer after some good analysis. 

Of course, all predictions depend on some large macro factors, with some drivers being bigger than others (to be discussed in-depth below), but economic demand, the durable goods index and the global oil market could lay all predictions to waste and start a new narrative at any time.  (How’s that for a disclaimer?!)

Here is a brief market overview and report on all the factors driving the current market, our expectations for where it’s headed, and most importantly, how to manage this market and come out on top!   

A litany of micro and macro-economic factors is at play in the current market and driving what we’ll experience going into 2019.  Most experts agree the market...

read more and download below!

2018 Review Report

Cursor-Bar.png "It's a quest... a quest for fun!"

By Brian Fox  |  Oct/Nov 2018

 

If you like roller coasters, and you handle them better than John Candy (the Wally World security guard), you might be enjoying this market!  The highs and lows have been staggering over the last several months and I think we’re all in the mood for some stability and a balanced market where we’re all happy and having fun. Say what you will about Clark Griswold in the infamous National Lampoon films, but he truly loved his family and just wanted to show them an epically good time and a memorable trip!  Depending on which role you fill in the supply chain, from shipper to broker to carrier, you’ve felt your share of “disasters” to your budget the last couple years. 

Here is a brief market overview and report on all the factors driving the current market, our expectations for where it’s headed, and most importantly, how to manage this market and come out on top!   

Read the full report ...

OCT/NOV Market Report

Cursor-Bar.png Logistics Moves Pretty Fast

By Brian Fox  |  Aug/Sep 2018

“Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.” — Ferris.  The iconic picture of these two looking at the Ferrari careening down the hill might describe the shock you are feeling as the market pivoted sharply this past month.  Of course, it depends on which side you are on as to whether you have a smile or a frown!  Just as “Ferris Bueller’s Day Off” enjoys a resurgence after 30 years we are reminded, once again, of how things are cyclical and we should be anything but shocked by the market’s volatility.  Studying truckstop.com’s MDI report, history shows that rates are following a trend by softening this time of year, but the drop has been bigger than expected.  It is also the same time that mother nature visited last year and gave us a big push into this current, chaotic market, so, it’s no time to take your eye off the ball and a great time to secure a good partner to make sure capacity is available for the upcoming months.

Here is a brief market overview and report on all the factors driving the current market, our expectations for where it’s headed, and most importantly, how to manage this market and come out on top!   

Making a market forecast can be as unpredictable as Ferris’ next scheme, but certain factors can help give us guidance.  After last year we all experienced the power of Mother Nature...download for the rest of the story:

AUG/SEP Market Report

Cursor-Bar.png Jaws 5 & the Freight Market

By Brian Fox  |  Jun/Jul 2018

As we head into the summer on a wave of record-high MDI we have the sense of uneasiness with the market and what might be lurking around the corner, or in this metaphor, below.  Much like the great original summer blockbuster Jaws, (which was released 43 years ago, sorry to make you feel old), the movie, like the current market, gives participants an “edge of your seat” scare as you don’t know what will happen next. 

Here is a brief market overview and report on all the factors driving the current market, our expectations for where it’s headed, and most importantly, how to manage this market and come out on top!   

Many variables shift and drive the market each month.  Government regulations, weather, seasonal shipping, the economy and the number of available trucks are the biggest factors that contribute to volatile rates.  Any of those factors could be “Jaws” in this scenario...download for the rest of the story:

JUN/JUL Market Report

Cursor-Bar.png Back to the Future & How to Beat Biff?

By Brian Fox  |  Apr/May 2018

The first quarter of 2018 was like a young George McFly sitting in the car before the dance; scary, unpredictable and a foreboding presence hovering over him.  Recently, it looks to be working out with the spot market softening and rates inching back down.  Many think this should continue short term.  

Here is a brief market overview and report on all the factors driving the current market, our expectations for where it’s headed, and most importantly, how to manage this market and come out on top!   

Whether it was 2014 or just last year, we’ve seen this type of market before.  As George Santayana famously said, “Those who cannot remember the past are condemned to repeat it.”  Many variables shift and drive the market...download for the rest of the story:

APR/MAY Market Report

Cursor-Bar.png Where are rates headed in 2018?

By Brian Fox  |  Feb/Mar 2018

The second half of 2017, and its impact on this market has been chronicled ad nauseam.  We now have many competing forces and variables at play with almost as many opinions on where the market will go from here.

Here is a brief market overview and report on all the factors driving the current market, our expectations for where it’s headed, and most importantly, how to manage this market and come out on top!   

Shippers were paying premium rates as the strong surge in business that began last year .

...download for the rest of the story:

FEB/MAR Market Report

New Year, New Market?

By Brian Fox  |  January 2018

Looks like we’re trading 2017 Hurricanes for winter cyclones and a Polar Vortex.  A historically high MDI will stay high with this weather being the driving force.  A resurgent economy, a long-awaited infrastructure proposal and new tax cuts will help ease the pain of these higher rates.

Here is a brief market overview and report on all the factors driving the current market, our expectations for where it’s headed, and most importantly, how to manage this market and come out on top! ...download for the rest of the story:

January Market Report

Is it a “Trump Bump”, ELD’s, Hurricane Hangover, all of the above?

By Brian Fox  |  December 2017

We know President Trump thinks he is driving the economy, but regardless if you agree, the economy and all the other factors swirling around our market will keep this roller coaster going for some time.  Here is a brief market overview and report on all the factors driving the current market, our expectations for where it’s headed, and most importantly, how to manage this market and come out on top! 

A stronger economy has been pushing more loads into the marketplace, and after a record-breaking...download for the rest of the story:

December Market Report

Is this the perfect storm to drive down capacity and drive up rates?

By Brian Fox  |  November 2017

No, but it’s certainly a turbulent and volatile market right now. 

Here is a brief market overview and report on all the factors driving the current market, our expectations for where it’s headed, and most importantly, how to manage this market and come out on top! 

A stronger economy has been pushing more loads into the marketplace while capacity has been shrinking with fewer drivers on the road.  As this was a slower, smaller storm front, Mother Nature intervened with much bigger...download for the rest of the story:

November Market Report