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Strong Volumes Ahead!

July 3, 2020

Despite the shutdown due to Covid-19, freight slowed for a short term, but volume is increasing, and markets are becoming tight. The prediction for more competitive shipping rates is starting to emerge as increased volumes lead to double-digit tender rejections. National volumes are staying strong and continuing June’s trend of being a steady increasing month. As previously mentioned, due to the pandemic, most industries reported small rebounds, but automotive vehicles and parts posted the largest gain. Factories are open and people are going back to work, which drives volume to stabilize in all fields at a new high level.  The worst of the recession is over, but how long freight volumes can run this high will depend on the consumer, who have been partly supported by the government stimulus and newly increased unemployment benefits. This helps eight of the fifteen major markets to increase. In specific, the markets with the largest gains this week were Fresno, California (9.08%), Dallas, Texas (7.84%) and Miami, Florida (7.67%). One the other hand, the markets with the largest decreases were Seattle, Washington (-9.62%), Ontario, California (-3.00%), and Memphis, Tennessee (-2.88%). Along the same line the Outbound Tender Rejection Index crossed the 7% mark for the first time since early March. As expected, it has taken some time for capacity to rebound to this high volume level, but we believe it is safe to predicted that carriers are feeling confident in their ability to decline freight and shop around for the best rates. As long as volumes remain elevated, the market will regain its competitive edge and should continue pushing higher capacities and putting pressure on rates.