Demand – The Economy is Strong. Is it Peaking?
We’re seeing macroeconomic indicators soften in Q3. GDP YoY Growth is down to 3.5% from 4.2% in Q2. While down from highs, this still shows strength in the economy for the next few months. Geopolitical shifts have largely impacted Los Angeles. NAFTA renegotiations were by and large negligible on logistics markets, but Chinese tariffs have caused freight flows to increase into LA as companies increase inventories ahead of some tariffs jumping from 10% to 25% on January 1, 2019. Look for LA to remain a hotspot for freight on top of normal holiday seasonality.Supply – The Bottleneck is (Slowly) Loosening
The trucking supply story for October is more of the same. Capacity is slowing increasing, but not enough to meet demand – yet. We’re seeing hiring in trucking up more than other industries with +2.2% YoY trucking versus +1.5% for all non-farm roles. Other signals are pointing to capacity continuing to increase. New truck orders are at an all time high while used prices are also peaking. We’re noticing fewer manufacturing reports citing driver shortage as their bottleneck.
US used trucking prices are starting to spike, coming off of extended lows due to supply shortages.
Convoy Recommendations – Move Freight NOW
Dry van and reefer demand is expected to continue to increase throughout the holidays. Shipping costs will increase with demand. Between now and mid-November shippers should take advantage of low rates and move as much freight as possible. In a few weeks, demand will start to spike and we will hit the holiday season. When drivers take vacation to be with their families, supply decreases, and spot prices go up. Shippers want to learn more about our industry-leading tender compliance, on-time service and data-driven insights? Request a demo or call us at 206-209-0305.Carriers – interested in a hassle-free experience, automated detention, free quick pay and unique offerings such as Request-A-Load? Call us at 206-202-5645
