The Weekly Freight Report for December 31, 2020

The Top 7 Stories in Freight

Here’s what’s happening this week:

  1. High demand will drive a tight 2021 freight market
  2. Consumer behavior delivered clear winners and losers in holiday sales
  3. Trailer pools don't always work. It's your utilization that matters.
  4. Port congestion expected to clog Cali freight well into the new year
  5. South Florida drayage network under strain due to volume influx
  6. Capacity issues are expected to spill over into the new year
  7. Increased industrial production drives increased dry van demand 

The hottest stories in freight can be found here, in the Weekly Freight Report:

1. Demand will drive tight 2021 market

Shippers will have plenty of freight to move in the new year. Maritime import shipments are way up…  and so are outbound tender rejections. With so much freight and so few carriers to move it, this nasty combo will keep the market tight into early 2021.  Shippers should anticipate the 2021 market to look a lot like 2018. Tight first-half conditions gradually loosening in the second half. See what’s driving the prediction here.

2. Retail saw winners and losers this season

“American consumers turned the holiday season on its head, redefining ‘home for the holidays’ in a uniquely 2020 way” said a senior Mastercard advisor. Data shows that this holiday, retail sales rose 3% year over year and online sales grew nearly 50%. It wasn’t good for all retailers, however. Online spending accounted for 19.7% of all retail sales while traditional department stores saw a 10.2% dip in sales. Check out who the holiday winners and losers were by sector here.


3. Fleets see inefficiency from unused trailers

As much as 20% of North American trailer fleets sit unused at any given time. Why? Because fleets tend to maximize driver hours which leads to more drop-and-hook freight. Sure, this benefits both shippers and drivers. But it’s also inefficient and costly to have trailers sit around until a driver can pick them up. Turns out the real solution is better visibility to the utilization of those trailers… check it out.


4. Congestion problems at Cali ports to continue 

Los Angeles and Long Beach port congestion is expected to continue into 2021. One expert even says seasonality will be “flattened out by a flat-out busy year.” The congestion is causing major issues including vessel bunching, congested marine terminals, lengthy truck queues at the gates, chassis shortages, and filled up warehouses. And while the ports are limited to the actions they can take, both LA and LOB announced initiatives they will be taking in the new year to ease congestion. Check it out.


5. South Florida drayage network under strain 

For South Florida ports, volume typically slows by November. But not this year. Telework and stay-at-home procedures have driven a spike in food, casual clothing, and cigar imports from Latin America. As such, laden imports rose 10% year over year in November and volume continued to surge into December. The result? Shippers are having to book days, sometimes even weeks in advance to secure a truck at South Florida ports. Get the whole story here.


6. Less volume won’t solve capacity issues in new year

2020 will forever be remembered by the transportation industry as the year of record highs. Record high rates, record-high volumes, and record-high tender rejections. But DAT offers shippers some promising news for 2021. The For-Hire Trucking Capacity Index shows signs of capacity starting to loosen up and the Cass Freight Index shows the shipment index dropped 2.2% m/m in November. But decreasing freight volumes may not be enough to ease the shortage of drivers headed into 2021. Get the details.

7. Increased production drives increased dry van demand

It’s good news for the industrial sector. The Federal Reserve reported a 0.4% increase in industrial production in November. Production has steadily improved since falling off in March and today, it’s almost back to pre-pandemic levels. Motor vehicles played a major part in increased factory production, which increased by 5.3% m/m. But improved factory production also means increased demand for dry van freight and finding a truck right now is no easy task. As the industrial sector comes back to life shippers continue to pay a premium as spot rates are up 33% year over year. Get the full report.

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