MARKET UPDATE - JUNE 2021

2021 continues to be a year that brings varying challenges in the global transportation marketplace.  Below are highlights of recent market trends and information by mode:

Trucking:

  • Spot Load Postings were up only 2% from April to May 2021
  • Spot Load Postings for May 2021 were around 4 times as many compared to those from May 2020
  • Van, Flatbed and Reefer load-to-truck ratios were up exponentially in May 2021 as compared with May 2020 (Flatbed ratio was up nearly 700%)
  • In May 2021, spot rates were up over 50% compared to May 2020 in all 3 equipment types.  All 3 equipment types reached all-time highs in the month of May
  • Diesel fuel remained at elevated levels, as it has increased 35% since October 2020
  • Analysts are expecting 2021 to continue as a bull market for trucking, especially LTL.  As the demand for LTL continues to increase, many shippers are attempting to build up inventory and look for opportunities to shift to FTL where feasible

Ocean:

  • As overall market demand continues to exceed supply, rates are continuing to increase on nearly all major lanes.  Shippers are facing congestion at many ports, and carriers continue to limit inland bookings due to bottlenecks at rail yards
  • For Asia to North America, a June 1 GRI was seen in the spot market.  Space remains at critical levels, pushing out transit times across all lanes
  • For Asia to Europe, market demand continues to exceed supply.  Significant rate increases were implemented on June 1st, with further increases anticipated in mid-June
  • Rates out of Europe to North America are expected to face heavy increases in June, with further adjustments potentially coming in July.  Capacity is expected to remain very limited through the end of summer to replenish inventory from heavy consumer spending
  • Rates out of North America to Asia and Europe are holding fairly steady, however, BAF is anticipated to increase July 1st.  Equipment and chassis is tight at the majority of ports and ramps
  • Booking is recommended at 5+ weeks in advance for Europe to North America
  • Booking is recommended 4 weeks in advance in the following lanes:
    • North America to Asia
    • North America to Europe (5-6 weeks from US West Coast)
  • Booking is recommended 3 weeks in advance in the following lanes:
    • Asia to Europe
    • Asia to North AmericaAir Freight:
  • Asia:  Rates remain near peak levels.  Flights were full for the month of May, and that is expected to continue through June
  • Europe:  Export demand continues to be very strong to the Americas and Asia.  Space seems especially constrained to the US West Coast as well as China and Japan
  • Americas:  US export capacity remains limited due to lack of belly availability.  It is taking about 3 days from booking to uplift to key European gateways.  The West Coast to Europe lane is the most constrained, while the Midwest and East Coast to Europe are more manageable.  Space to India is very constrained due to COVID aid/relief shipments taking up space.  LAX and ORD ground handlers are faced with backlogs and reporting 3-6 day lags in breaking down freight from inbound flights

Parcel:

  • In April, both FedEx and UPS brought back the late shipment recoveries, or Guaranteed Service Refunds (GSRs), for next day services only.  No announcement has been made regarding when they may offer them for other services
  • Both FedEx and UPS continue to apply the COVID/Peak 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 with those continuing to rise).  On May 23rd, UPS increased these charges out of China, Hong Kong and Taiwan.  FedEx also made some additional adjustments on May 10th, primarily on freight shipments
  • FedEx announced they will increase the Peak Surcharges on June 21st as follows (effective until further notice):
    • Residential Delivery:  Doubling from $0.30 to $0.60 per package
    • Additional Handling:  Going from $3.00 to $3.50
    • Ground Economy (formerly SmartPost) Surcharge:  Going from $0.75 to $1.00
    • Oversize:  Remains at $30
  • UPS will also continue charging the following Peak Surcharges (no announcement yet on whether they will increase these charges):
    • $31.45 Large Package
    • $3 Additional Handling
    • $0.30 Ground Residential and SurePost Surcharge
  • UPS has adjusted their Additional Handling and Large Package Surcharge applications.  Zone 2 was reduced, Zones 3-4 remain unchanged and Zones 5+ were increased
  • Due to capacity issues, UPS and FedEx have trended towards limiting or shifting away from certain lower-margin portions of the business and focusing on more profitable accounts
  • In order to compete in the growing package market, the USPS is beginning to replace its fleet and has outlined a 10-year/$40B business plan for various modernization projects
  • As many regional providers have reached capacity, a few newer regional providers such as Optima and PCF have been able to accept new volume and should continue to see growth through 2021.  Also, LaserShip just expanded their service offerings to include Tennessee


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, etc. For more information, please contact Jeremy Levesque at jeremy.levesque@data2logistics.com or 704-992-8016.