May 8 2021

Concerned about summertime capacity?

St. Louis Managing Director Justin Danks takes us through a few of the outside factors affecting TL capacity as summer quickly approaches:

Video Summary

  • In 2020, we saw LTL carriers forced into bankruptcy. Now, labor shortages and e-commerce pressure have these already-struggling networks creating embargoes to rebalance and catch up.
  • International transportation is also in chaos. The significant number of blank sailings in 2020 has led to limited availability of containers, among other factors.
  • Limited travel and tourism have also limited international air freight supply. Commercial airlines play a huge role in air freight industry and international travel spending fell an unprecedented 76% from 2019 to 2020. Travel, thankfully, looks to be rebounding slightly.
JustinDanks SunsetSays
  • With unreliable LTL networks and International imbalance, more volumes are being pushed to TL carriers. Port volumes, resource delays, and general upstream supply chain disruptions are creating more need for expedite shipments. All of this combined pressure is causing more demand on the spot market and driving prices to unprecedented levels.
  • We don’t see relief in sight:
    • DOT blitz week takes equipment off the roads.
    • Multiple major holidays- Memorial Day and 4th of July disrupt supply significantly as equipment is displaced.
    • Port backlogs continue to boom as labor shortages also continue.
    • Produce season is a wild card, still uncertain when, or how much will effect the market.
    • The biggest impactor to overall supply is lack of available driver schools.
    • Driver schools were shut down by COVID.
    • An estimated 30K drivers lost their CDL’s in early 2020 due to the new Drug & Alcohol Clearinghouse rules and this supply has yet to be replaced.
  • There are positives though:
    • Class 8 truck sales are back to 2018 levels, meaning carrier are investing in their fleets to increase capacity and retain qualified drivers.
    • I also expect to see more signing bonuses and pay increases for drivers are carrier fight driver retention.
  • Summer 2021 is definitely a carrier’s market and shippers are paying premiums to get their product to the shelves.

If you require assistance with re-aligning your logistics programs due to these factors, please contact [email protected] so we may get you back in the driver’s seat.

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