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 Director of Carrier Sales, Jordan Abrams, 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
- As van and reefer levels have started to come down, flatbed freight has been making a comeback. Last week, flatbed surpassed van and reefer spot rates, averaging $2.85/mi, while van fell from $2.85 to $2.71/mi.
- This is a return to normalcy, as flatbed freight is typically more costly than dry van, but also shows signs of the broader economy as flatbed is closely tied to industrial production and construction, the former has yet to fully recover from the initial blow of the pandemic.
- A new week and the same story for the ports of Southern California. According to the Marine Exchange of Southern California, there were 33 container ships at anchorages and 26 at berths as of Wednesday last week. Including all ship types, there were 55 vessels at anchorages – a new record, with all Los Angeles/Long Beach anchorages full and all contingency anchorages off Huntington also full.
- Port congestions and bottlenecks have reportedly improved in the past few weeks, but will most likely not get much reprieve during the Chinese New Year as there have been little blank sailing announcements. Compared with last year, trans-Pacific trade blanked 2.1% of total deployed capacity to the West Coast and 3.6% to the East Coast vs. 30.5% and 27.7% respectively last year.
What To Expect This Week
- Winter Storm Orlena will blanket the northeast with up to 2 feet of snow on Monday and Tuesday of this week. The storm, which started a cross-country journey in California last week, tracked thru the Midwest over the weekend and dumped over 8 inches in Chicago.
- The snow will not be the only issue in the Northeast, meteorologists are expecting coastal flooding throughout New England, as well as high wind and flooding along parts of I-95 all the way down to Virginia and the Carolinas.
- Heavy snowfall could return to the Northeast by Friday, after hitting the Cascades, Sierra Nevada and northern Rockies Tuesday and Wednesday as well as the Midwest Thursday.
- OTVI continues to hover around 14,000 and as of the start of this week is at 14,600, 40% higher YoY. Though volumes remain high, rejections are coming down to single digits off of previous highs. This is largely due to contract rates increasing.
- According to DAT, contract rates are now $2.40/mi, $0.02/mi higher than spot, the first time that contract has been higher since July 2020. Though spot rates are on the decline, do not anticipate quick decline.Contract and spot rates are making moves towards each other. Stay tuned as we expect them to meet in the coming months, causing shippers to contract more and more capacity
- Winter weather will hit the midwest and northeast causing delays and capacity crunches. Plan around the weather to take advantage of capacity leaving the regions.
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