Transplace reports continuing spot pressure in US FTL markets
Bullish rate outlook for US LTL markets in 2021
Transplace has released a Q4 market update with guidance to manage uncertainty in Q4 and beyond. The quarterly update uses insights from Transplace’s Transportation Management System exclusive data derived from its more than US$11.0 billion in freight-under-management.
In US Full Truckload (FTL) markets, the Company reports that spot pressure continues but has flattened, whilst contract rate pressure is increasing and following spot. Route guide performance had dropped but has stabilised. Inflationary pressures continue out of Q3, 2020.
Across US Less than Truckload (LTL) markets, tonnage is up across most carriers, though labour and fleet expansion efforts have stalled due to uncertainty. There have been O/R improvements across many major providers and there is a bullish rate outlook for 2021.
US Intermodal markets see long-haul volume continuing to surge, driven by imports, with significant 53’ constraints in California. There is increasing demand in the East, especially into Florida. Rails have ramped up operations to handle the increase in volume and a number of terminals are experiencing congestion.
US Bulk has seen a strong volume rebound in Q3, 2020, though for the most part, rates are holding steady. There has been a spike in carrier turnback’s and increased broker usage. Transplace is expecting flat to moderate (0.0% – 2.0%) rate increases in Q4, 2020.
Mexican FTL markets continue to display North-South imbalances, as truck repositioning and paid empty miles are key tactics. NOM-051 labelling regulations are exacerbating historic inbound congestion levels. Driver shortages resulting from B1 regulations and the COVID-19 impact are adding to capacity shortfalls.
In Canadian FTL / LTL, there has been a stable capacity environment in the historical peak season, with bids yielding cost savings and a shift to more CPU in play for grocery inbound.
For international air markets, global load factors rose to 71.0% in the week of September 28, up 2.0% from August and 8.0% from September 2019. Global air cargo capacity in September was 25.0% lower YoY in 2019. The Company reports that only 28.0% of participants in the air cargo industry feel they are well-prepared to distribute a COVID-19 vaccine.
In international ocean markets, the Company notes that US imports increased 15.0% YoY in September. Transpacific carriers increasing capacity to 26.0% USWC and 31.0% USEC, with no recent blank sailings for Trans-Atlantic trades.