The freight frenzy came on fast but seems to have left even quicker. US Freight volumes have plunged to the lowest rate since Freightwaves began recording them in 2018.
Capacity continues to loosen with most of the country on lockdown and with industries not fully functioning there isn’t enough freight to keep capacity tight.
Logistics and supply chain companies remain the backbone of the U.S. economy and the American way of life.
So, how do supply chains continue to function smoothly and consistently during such an unprecedented and unplanned for global crisis?
Over the past year, the outbound tender index had been remarkably low, putting pressure on carriers and brokers throughout the market because the majority of freight was moving through primary award carriers.
The market saw low rates of rejection by carriers as they were grabbing all their contracted or fixed opportunities, leaving little spot or overflow freight available for carriers and brokers.
Market conditions quickly shifted in late February and March due to the COVID-19 pandemic. We initially saw levels that exceeded 2018 in early March, but now things are starting to return to pre-crisis levels.
It’s not just the extreme levels that we saw, but the rate of change that was extraordinary. It wasn’t a steady gradual adjustment with capacity decreasing week over week or month over month with rejection rates increasing, leaving more spot freight on the market. It was as though, almost overnight there was an explosion of spot freight coming into the market that needed to be covered.
It’s important to note that what we are all seeing behind these numbers is not just business as usual. Seasonality trends and all normal expectations were pushed aside as the highest levels in months appeared out of nowhere.
Moving freight is always a critical function in the US economy, but the unprecedented level of urgency, the critical nature of the goods being moved and the need to get them to their destination quickly given the current crisis situation.
