Freight Insights for Week of April 5

Freight Insights for Week of April 5


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 April 6 call:

FREIGHT VOLUMES & CAPACITY

  • Diesel FSC average at $3.144 this week, down .017 week-over-week, still showing a slight and temporary leveling.  Prices expected to hold for a bit, then climb in connection with the season change and warmer weather usage. Prices for diesel are close to .60 cents more YOY.
  • Reefer capacity is temporarily loosening, but is not causing rate reductions.  Easing of capacity is noticed with MX cross-border, NW region, and N. Florida.  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 – Outbound reload rejection rates on the rise.  OH/GA/TN/TX are hardest hit at the moment for overall state movements.  Rates are almost double given port surge and capacity issues and are expected to continue to get worse for the next few months while congestion attempts to clear.  Manufacturing is expected to begin summer surge, which will hit this area even harder along with consumer spending anticipated to rise.   
  • Flatbed – Produce, Steel and Lumber are all competing.  Prices are expected to start rising quickly for freight over the next few weeks; preliminary figures show close to 150% cost rise by 5/1.
  • IM rates are up close to 22% YOY.  Customers are using rail options and longer transits to help curb some of the trucking fees being experienced. Best lane for pricing rail is Inbound CA due to imbalance of containers coming out of CA port, which is running at a steep discount.  Watch for Dry Van being DOUBLE BROKERED and transloaded to capitalize on these savings.
  • Class 8 truck orders are up 424% last month, signaling economic boom for the industry. While orders are coming in at record levels, anticipated wait times of 8 months to receive equipment is tasking the used truck market heavily.  Be on the lookout for growing carriers to have higher OOS percentages due to older equipment being put back on the road to keep up with growth and demand.  Carriers are expected to put trucks on the road in mass volumes after International Road Check Week from 5/4-5/6.
  • Weather Updates:
    • Wind advisories across the Midwest and West while weather front comes in over the next several days.
    • Wildfire concerns in CA as water levels are at historical lows.
    • Storm surge expected in Midwest and SE tonight into tomorrow, where flooding is already an issue and is expected to have pretty strong cells with winds/tornados/heavy rain.
  • Several laws and regulation changes are being discussed that have and could impact the industry.  California CARB laws are a hot topic as deadline is moved out to 5/1 and additional regulations are being added.  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).
  • Warehouses in Canada are at full capacity and full across U.S. in port regions with fast progression further inland.  Lack of supply is steadily causing costs to rise with additional rise expected over the next few months as the ports and manufactured stock begin clearing. 
  • 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 prepare for the transition.

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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