The Daily Dash is a quick look at what is happening today in the state of freight.
When will the freight market bears throw in the towel?
There are still quite a few freight market watchers who are bearish on volumes and a recovery. This is with outbound tender volumes exploding higher, along with spot market rates. At this level it won’t be long until market chatter focuses on hikes in contract rates.
The Outbound Tender Volume Index (OTVI) continues to expand week over week. This week, outbound tendered load volumes were up another 2.9%. The rate of carriers rejecting these tenders is now 22% — or one out of every five loads. This means there are 35% more outbound load tenders going out into the market than during the same week in 2019.
This level of capacity tightness hasn’t been seen since the height of the 2018 bull market in trucking. It was not too long after this point that 10% contract rate hikes were the norm.
Seth Holm has more in his weekly freight market wrap-up: Volumes in cruise control, up 35% year-over-year.
Along with this week’s DHL Supply Chain Pricing Power Index, When will the contract market catch up with spot rates?
Is shipper of choice about to become a buzzword again?
In 2018, as load volumes surged and capacity tightened, the talk of a “new normal” in trucking was ubiquitous. You couldn’t get away from hearing how this would be a five-to-10 year cycle and how being a shipper of choice was essential. Then came 2019 and the flood of new truck capacity to the market and the shipper of choice buzzword was forgotten.
Now, with tender volumes ripping along and capacity tightening significantly, we see that dwell times have been cut by a third. Is this a sign of shippers trying to attract the best capacity, or are there other reasons?
Zach Strickland explores the possibilities of why dwell times have fallen by one-third since March in his Chart of the Week, Wait times plummet as capacity tightens.
Product launch season should continue to drive air cargo
We have established that full truckload tender volumes have exploded and are showing no signs of slowing. We also know that year-over-year airline passenger counts, as measured by, Transportation Security Administration (TSA) checkpoints in the U.S. are down 75% compared to 2019.
How’s the air cargo market performing though? Well, air freight rates from China are on the rise — specifically from Shanghai. While medical equipment is still in high demand, electronics and e-commerce are strong as well. This should continue as product launch season for all the phones and tablets that we all love is just around the corner.
Eric Kulisch has more details on how product launch season will drive air cargo demand, Pressure on air cargo rates from China keeps increasing.
No time like a trip to Cancun while you are facing trial for fraud in a pandemic
If a pandemic wasn’t enough to make one question whether heading to an international tropical resort was a good idea, asking the court to allow you to use your passport while you are under indictment for fraud is a head-scratcher.
This is the latest story-line that is coming out of the Celadon bankruptcy. A federal judge ruled this week that former Celadon Chief Operating Officer Eric Meek could not take a family vacation to Cancun — even if he had booked and paid for it before he was indicted — this December, due to flight risks.
Eric Meek’s trial is set to begin in May 2021, so his international vacations look to be on hold until at least next summer.
Clarissa Hawes has more detail on the argument and trial here: Federal court denies ex-Celadon COO’s request for birthday trip to Mexico.
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