Freight Insights for Week of March 29

Freight Insights for Week of March 29


The following insights are taken from a weekly discussion between Sunset’s nine US/MX branches.

Trends and discussions range from seasonal manufacturing and agriculture trends that affect available capacity to general insight into outside factors affecting freight volumes.

Below is a summary of the March 30 call:

FREIGHT VOLUMES & CAPACITY

  • Tier 1 manufacturers in MX are having shortages in sourcing materials, thus slowing down production as a whole on both sides of the border.
  • Vaccine rollout is happening in both US and MX, a bright spot for resuming business production to pre-COVID19 levels and beyond.
  • Air freight capacity is extremely tight due to Suez Canal backups.
  • Expedite market is very competitive right now.
  • Diesel FSC average is at $3.161 this week, down .03 week-over-week, showing a slight and temporary leveling. Prices expected to hold for one week, then climb in connection with the holiday push and warmer weather usage.
  • Reefer capacity is temporary loosening, but it is not impacting rates with any expected reductions. While volumes have dropped slightly helping the supply, shippers are bracing for the upswing in two weeks when produce is in full swing.
  • Dry Van – Carrier rejection trends took a sharp upward turn.  The influx of materials from ports, cross-border dry produce, and additional purchasing of consumers with stimulus money is driving unprecedented demand.  Certain regions are experiencing rate hikes over 50% week-over-week due to the shift. Upper Midwest, GA, OH are getting hit the hardest.
  • Flatbed – Steel Manufacturing and Lumber competition, damage done from severe weather and relief efforts for structure rebuilds, and normal spring home building are all hitting at once and creating a severe shortage of the available equipment in market.  Prices are expected to start rising fast for freight over the next few weeks; preliminary figures show close to 150% cost rise by 5/1.    
  • IM rates are up close to 20% YOY.  Customers are using rail options and longer transits to help curb some of the trucking fees being experienced.
  • Warehouses across U.S. are filling up while customers wait for rates to drop.  Due to lack of supply, expectation is for rates to raise close to 10% in the next month.
  • Weather Updates:
    • SE is hit with heavy rain, causing flooding and delivery concerns for the region. Rain hit badly this past weekend, and more is expected tonight and tomorrow. 
    • High wind threat in the Midwest until Wednesday night.
    • Alberta, Canada and surrounding regions are experiencing heavy snow and strong winds, causing road shut downs and overturned tractor trailers.
  • Several laws and regulation changes are being discussed that could impact the industry.  Vehicle Miles traveled tax (specifically for LTL options)/ Biden’s Transportation Review/ ABC test/ DOT HOS Changes/ FMCSA policy changes and regulatory review (Emergency Declaration extension to May 31, Commercial Driver Panel, Drug and Alcohol Clearinghouse).
  • Canada is gearing up for a soft ELD transition for any trucks crossing border; start is 4/1 with a June deadline.  U.S. ELD regulations will not be enough for Canadian compliance, so carriers are rapidly trying to get things ready for the transition.
  • The 10-digit dialing system will impact 37 states.  For key areas, local calls will require the additional 3-digit area code to be typed in for call completion.  This falls in line with a new “988” National Suicide Prevention Lifeline.  Conversion starts 4/24.

Industry data is pulled and summarized weekly from key proprietors and industry experts using multiple publications and sources. Some examples of the publications used are Freightwaves, Transport Topics, American Shipper, American Cranes & Transport, FMCSA, DOT, SC&RA. The information is discussed with Sunset Managing Directors and validated prior to publication of summary data in this posting.


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