Weekly Freight Market Update: Capacity Moves to Warmer Markets
Industry Insights, Shippers • Published on February 9, 2019
Punxsutawney Phil, the groundhog who predicts spring, did not see his shadow last week — which supposedly means an early spring is on the way. Regardless of the groundhog’s shadow, analysts are keeping a keen eye on spring shipping, which will kick off within the next three to six weeks. Goods needed for home improvement, gardening, and construction will need to make their way to store shelves and will drive volumes and rates up.
As we wait for the seasons to shift, winter is still freezing much of the country and causing havoc on roadways and within supply chains across the country. Storms in the Midwest, Southeast, and Pacific Northwest are likely to cause a short-term capacity crunch. Many carriers will try to spend the remainder of winter further south to limit risk and maximize asset utilization.
Carriers headed to warmer markets
Markets in the Northeast, including Baltimore, Maryland, Harrisburg, Pennsylvania, and Cleveland, are experiencing increased rejection rates, revealing tightening capacity. This would typically indicate increased volume that is using more trucks — but in this case, volume has actually decreased.
The imbalance is due to capacity moving out of an area with looming adverse weather. Memories of gelled fuel and closed roads are still fresh from last week when a storm left drivers stranded, and they don’t want to repeat the scenario.
This is benefitting shippers in some regions.
In the Southeast, for example, some markets are attracting carriers from the north and seeing relatively large volume increases. Nashville, Tennessee has seen 25% more freight over the last eight days. Charlotte, North Carolina is another bright spot with 1.55% of the nation’s freight and a 52-week-low rejection rate of just 5.76%.
Want to know what’s happening where you ship?
See a detailed breakdown of trends in your region with the Convoy Shipper Platform. The Market Outlook curates a view of freight impacts and trends by region to give you a full picture of the market. It’s free to access — simply sign in or register now.
Convoy Shipper Platform is now part of Convoy’s integrated online platform for shippers. For more information, take a look at our freight booking software.