Q3 2020 LTL Capacity Outlook
In order to manage current LTL market conditions, Sunset LTL shippers should be aware of the daily capacity and pricing challenges we’re seeing firsthand as COVID-19 measures continue. These challenges are plentiful and often cause a (supply) chain reaction; many customers have already begun to see the effects.
The following is a comprehensive list of LTL trends likely impacting your freight:
- More shippers are holding lower volumes of inventory which translates to more freight moving via LTL.
- Freight volumes are increasing, straining the LTL and Truckload (TL) carrier networks.
- In the TL spot market, capacity is tight and rates are increasing, pushing a surge of volume into LTL networks.
- One confirmed case of COVID-19 can shut down an entire LTL terminal. Increased sanitation measures have been put in place, but if someone tests positive, they will shut down to quarantine and sanitize. This causes missed pickups, deliveries, and delays in transit not for days, but weeks. There is no way to predict this and closures doesn’t have to be reported publicly. Some carriers are now placing freight embargos to certain terminals due to outbreaks.
The message inside the LTL industry is “no one wants to full re-onboard their workforces because they are concerned with more shutdowns“. Critical shutdowns in major freight states like Florida, Texas, Arizona, and California means carriers cannot bring employees back to work, which translates to trailers being held hostage at customer locations and power at terminals without the ability to move the load.
- Civil unrest across the U.S. has and is causing delays, as LTL carriers will not send their drivers into areas that are deemed potentially “unsafe”.
- Equipment and driver shortages are extremely real right now across the industry. Many agent carriers and owner-operators have gone out of business as a result of current economic conditions, hurting national carriers that use these smaller partner carriers in certain states.
It remains difficult to imagine things returning to normal for the rest of 2020. The immediate future isn’t bright for many of our carrier partners. Despite a grim near-term outlook, Sunset is committed to avid communication regarding your freight. Reach out to your Sunset Customer Rep for additional solutions or insight.