FreightWaves: January Market Trends Update
Demand – Growth Slowing, Shutdown is Delaying Full Data Picture
The big news over the last month was the longest government shutdown ever. We are feeling the effects now and another shutdown could be looming on 2/15. While government workers will receive back pay for the shutdown, contractors and other jobs are not, reducing consumer spending. Some of these effects we can’t see yet as various government bureaus paused publishing data and now have a backlog. We see consumer spending decrease overall.Shorter Facility Wait Times Show Slowing Demand
Convoy’s data has given us further insight into the slowing demand. We took a look at wait times at facilities and are seeing drivers aren’t waiting as long to get loaded. While this seems like a good thing for a driver, it typically comes from less traffic from less outbound freight. Wait times are much lower than they were the same time last year.
This graph shows the average number of hours a driver must wait before getting loaded at a facility using Convoy internal data. Compared to this time last year, wait times are much lower, implying less traffic at facilities from less outbound freight.
Supply – Capacity is Available
Seasonality and slow demand are freezing spot markets. We’re seeing tender rejection at all time lows as carriers and brokers are scrambling to accept contract freight. This is supported by DAT’s national rates. Convoy’s Market Supply Index is showing excess supply almost across the board. The main exception is Midwest reefer, where the polar vortex is forcing shippers to heat trucks to ensure products are not damaged from frost.
Convoy leverages our unique data to create a clear picture of the market and demonstrate how easily you can book a truck at the current market rate. The Convoy Market Supply Index helps shippers understand the market at a glance and make better decisions about booking now versus later.
Convoy Recommendations – Supply Has Slack, Take Advantage of Good Rates and Service
Shippers should be taking advantage of low tender rejection and moving all the freight they can right now, over both the contract and spot markets. These spot rate lows will not only be the cheapest for 2019, but also probably the next couple years. Shippers – interested in learning more about our industry-leading tender compliance, on-time service, and data-driven insights?
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Carriers should look to hold brokers and shippers accountable for contract freight to float you through these low demand periods. Make sure shippers know you’ll be there in June when demand spikes again.
Carriers – interested in a hassle-free experience, automated detention, free quick pay, and unique offerings such as Request-A-Load? Learn more, or call us at 206-202-5645
