MARKET UPDATE - JANUARY 2021

While the temporary slowdown during the Christmas and New Year’s holidays opened up some opportunities, demand is expected to pick back up with capacity remaining tight through the first few months of 2021:


Trucking:

  • Spot Load Postings for December 2020 were up nearly 40% of those from December 2019, which is actually lower than the trend from recent months where we saw spot loads about double those YOY
  • Flatbed load-to-truck nearly tripled in December 2020 as compared with December 2019, indicating a shortage in this equipment type
  • National rates for van, flatbed and reefer in December remained aligned with November, but are still hovering around all-time high levels
  • Spot market activity dropped off considerably during Christmas week, however, by the end of the week capacity was lacking, so many shippers paid premium rates
  • Many trucking companies, especially in LTL, appear to be at capacity, causing several to shy away from additional business with their larger customers


Ocean:

  • Asia to US West Coast spot rates hit an all-time high last week, reaching $4,189 per FEU (forty-foot equivalent unit).  These rates are now triple what they were just 1 year ago
  • Asia to US East Coast spot rates were at $5,397, which is double what they were 1 year ago
  • With impending January GRIs and surcharges having been added in December, rates are expected to remain at extremely high levels for the start of 2021
  • Capacity remains tight in the majority of lanes, especially out of Asia
  • Booking is recommended 3 weeks in advance in the following lanes:
    • Asia to Europe
    • Asia to North America
    • Europe to North America
  • Booking is recommended 10-14 days in advance in the following lanes:
    • North America to Europe
    • India to North America


Air Freight:

  • Asia:  Rates from Asia to US and Europe remain at very high levels.  With high demand due to items such as new gaming consoles and smart phones, the market is expected to stay hot at least through the Chinese New Year.  Capacity continues to be a concern with further lockdowns and COVID-related restrictions
  • Europe:  Capacity from Europe to Asia, North and South America remains available with the exception of the UK, which has been impacted by lockdowns and cancellations of passenger flights
  • Americas:  US to Asia, Europe and LATAM all appear to have availability (excluding the UK).  Most of the US airports were able to work through the cargo backlogs during the holidays


Parcel:

  • The General Rate Increase (GRI) for 2021 is now in effect for both FedEx and UPS.  This includes an average of 4.9% on the base rates, as well as increases to the majority of their main accessorials, with most ranging between a 5-10% increase
  • The USPS announced their general rate increase, effective January 24, 2021.  While most of the increases are fairly mild, shippers and consumers need to be aware that lightweight e-commerce parcels (Economy “Parcel Select Lightweight”) is going up by almost 19%
  • Both FedEx and UPS continue to apply the COVID-19 surcharges on international shipments (the costs vary, starting at around $0.10/lb on most shipments, but substantially higher out of places like China and Hong Kong)
  • FedEx and UPS will continue to charge their “temporary” peak surcharges (FedEx through January 17th and UPS through January 16th).  Upon expiration of those charges, FedEx and UPS will extend the following charges:
    • FedEx:  $30 Peak Oversize, $3 Peak Additional Handling, $0.75 SmartPost Surcharge
    • UPS:  $31.45 Large Package, $3 Additional Handling, $0.30 Ground Residential and SurePost Surcharge
  • Capacity remains an issue amongst the main parcel carriers.  This has led to numerous shippers looking at alternate solutions to manage capacity, such as using regional providers like LaserShip, LSO and OnTrac.  This has become such a trend that now many of the regional providers have had to turn away volume as well
  • UPS and FedEx have continued capping the volumes from some of their larger customers, or even asking some to reduce their volume.  There appears to be a shift towards smaller shippers with higher margins


Data2Logistics has a dedicated “Professional Consulting Services” team that can help you identify opportunities across all modes.  We provide various services such as data metrics/analytics, market studies, carrier strategy/negotiation, and other focused projects. For more information, please contact Jeremy Levesque at jeremy.levesque@data2logistics.com or 704-992-8016.