It’s a new year and the domestic supply chain is still dealing with overwhelming demand.
Volatility from peak season spilled over into domestic freight markets in the final week of 2021. Due to weather, wildfires, and new coronavirus cases, shippers will have to spend the first couple of weeks of 2022 playing catch-up. As consumers continue spending money and businesses face issues with restocking, domestic supply chains remain overwhelmed by imports. The ports of New York and New Jersey provide a perfect example. In 2021 they saw volume growth they weren’t expecting to see until 2025. Import volumes have proven instrumental in influencing over the road capacity over the past year and that trend will continue into 2022.
Requests for loads are coming in a little lower than usual which is typical after the Holidays. Despite a downward trend for the last quarter of 2021, demand for over the road capacity is running 5% higher than it was this time last year. Currently shippers are requesting between 10,500-11,000 loads per day. Of those loads, 21-22% are being rejected. It’s important to note that rejections have held steady since the Holidays – something that hasn’t happened for the last two years. Ordinarily, there’s a significant drop off in rejection rates when the year comes to a close. And even though rejection rates are significantly lower than they were this time last year, they’re erasing some of the seasonality that is typically associated with a new year.
As a result of the capacity crunch of 2021’s final week, spot rates are up $.12 a mile at $3.56 on average. Spot rates continue to run upwards of 20% year over year. This trend shows the extreme demand for capacity, proving that there just aren’t enough trucks to move goods.