Despite new COVID cases and extreme weather hampering the supply chain, there’s a light at the end of the tunnel. In terms of loads hitting the road 2022 is outperforming 2021 by about 5.5% and shows no signs of stopping.
Let’s talk about what should happen in January. Demand should decrease, contracted rates should become easy to secure, spot rates should decline, and rejections should drop steeply. What’s happening instead? Demand, while not back to pre-holiday levels, is starting to climb. Rejections also continue to hold steady, especially for reefer capacity which is breaking seasonal records. Load to truck ratios sit at 10:1 (10 loads for every truck), which pales in comparison to the 20:1 we saw in preparation for peak season, but marks a 50% increase over last week.
As part of the IIJA, the Biden Administration has announced how it will distribute $27 billion in funding for the federal bridge repair and replace program. California received the largest cut at $4.25 billion, followed by New York, Pennsylvania, Illinois, and New Jersey.
Demand for capacity is coming back strong with shippers requesting between 14,700-15,900 loads per day. Of those loads, 19%-20% are being rejected. Additionally, a tightening in reefer capacity has reefer rejections at nearly 40% because of winter storm related disruption. And with produce season on the way there’s sure to be continued tightening for reefer capacity.
Overall, the amount of accepted loads has increased by 27% since last week and 5.5% since this time last year. Even though the market is elevated, there seems to be strong evidence that accepted loads will continue to outperform 2021.
Spot rates set a new all time high at $3.83 a mile on average. This eclipses the last record set on Labor Day 2021 by just over 3%.