It’s the last month of the year and after a slow November things are starting to pick up.
With the passing of the Thanksgiving holiday, markets are starting to pick up again. Load to truck ratios are at about 5:1 and as of last weekend there were 96 ships at anchor off the coast of Southern California. In addition to that, consumers are spending 16% more than they were this time last year (and you’ll recall that last year was the year that Ecommerce grew 4-6 years in just a few short months). And because sales continue to outpace restocking efforts, capacity is still tight. Until new capacity floods the market – or until consumers start spending less – we’ll continue to see elevated markets well into 2022.
Over the road markets have snapped back to their pre-Thanksgiving levels with load requests coming in at around 15,000 per day. Rejections are still hovering between 19%-20% which is about 5% lower than this time last year. Even with loosening capacity and decreased demand, anything over 10% is more than the market can handle right now.
Spot rates went up $0.7 thanks to the Thanksgiving holiday. They’re averaging $3.47 a mile which is 14% higher than they were this time last year.
Orders for class 8 trucks hit a 26-year low in November and supply chain uncertainty is to blame. November’s order volume is 82% lower than order volume in 2020. Many manufacturers have a 14 month backlog, meaning that a new truck order now would not hit the market until 2023. Until new trucks hit the road there simply won’t be enough capacity to accommodate for increased demand. While some outlets say that a decrease in consumer spending is the solution to supply chain shortages, it doesn’t seem likely to happen.