This is a weekly series that brings the insights we use to get your shipments from A to B from our carrier sales floor to your home office.
This week Loadsmart’s Carrier Sales Solution Manager, Jimmy Fahey, breaks down what happened last week and what to expect this week in the freight market in less than 60 seconds.
What We Saw Last Week
- Following the Thanksgiving holiday, the national OTRI fell from a historic peak of 28.46% to around 26% and trending downwards. Capacity is still tight and rejections are high, but anticipate rejections to trend downward for a short period of time until the week of Christmas, where we will see rates start to climb once more. Anticipate volumes to increase as shippers attempt to take advantage of loosening capacity.
- OTVI declined last week as well, but it is worth noting that it is a 7 day moving average, and, as such, can be distorted in the week following national holidays. Compared to the previous two years, the decline was slightly more shallow, suggesting volumes may snap back when the index normailizes.
- Rates are on their way up as the holiday surge put pressure on capacity leading to higher rates. The Truckstop Avg LH had a massive $0.14 jump to $3.05/mi.
- Last week market insight firm Principia said that inventory levels at building materials dealers have reach the lowest level since the peak of the housing bubble in 2006. The result of reduced staff in factories or shutdowns due to COVID-19 precautions. This has implications for industrial and transport demand. With the construction market caught off guard, this has created a backlog of homes that have been permitted and is leading to longer construction times for homes not yet completed. These constraints are anticipated for the next several months due to sustained strength in demand and translating to outsized growth in transport demand.
- Trucking goes Ivy League. Last week USX did something wicked smaht and announced a partnership with MIT to look at driver efficiencies. The primary focus will be on dwell time and driver utilization.
What To Expect This Week
- For this week, look for US imports to decline and post the lowest volumes since July 2020. However, importers are continuing to bulk up inventories and all indications are showing another surge of imports that should begin arriving in the next few weeks. This had led to speculation that volume could remain elevated into January and Feb. of 2021. As of Monday, 20 vessels were anchored off the coast of LA and Long Beach, with an additional 16 expected by Friday.
- Jobless claim and job opening will be watched closely this week and throughout the month. Claims have yet to fall below 700,000 since the pandemic onset. An increase in cases and a lack of stimulus will place headwinds on consumer activity into 2021
- On Sunday lawmakers closed in on a proposed COVID-19 relief bill that would provide roughly $300 in extra federal weekly unemployment benefits, but not another $1200 in direct payments to most Americans. This will be an issue for the next administration to deal with next year. The $908 billion aid package being released on Monday would be attached to a larger year-end bill that would advert a government shutdown.
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