MARKET UPDATE - MARCH 2021

After experiencing the largest holiday peak in history, as well as e-commerce experiencing 5 years of growth in a 10-month period, shippers continue to face rate pressures and uncertainty in the transportation market:


Trucking:

  • Winter storms in mid-February covered more than 70% of the country in snow, causing massive amounts of storm damage.  This caused the capacity in the 2nd half of February to rapidly tighten.  This moved record-level volumes into the spot market, sending rates soaring
  • Spot Load Postings for February 2021 were up 160% compared to those from February 2020
  • Van and Reefer load-to-truck ratios were quadruple in February 2021 as compared with February 2020 (Flatbed ratio was also triple), indicating a continued shortage in all equipment types
  • National rates for van and reefer both rose in February, climbing back towards their all-time highs in November/December.  Flatbed rates continued their climb to their peak levels as well
  • Spot market activity was also up in the last week of February compared with the prior week, as heavy demand continued
  • Analysts are expecting 2021 to be 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:

  • Rates out of Asia to North America dropped slightly overall.  Rates from Asia to Europe were extended, most likely until mid-March.  Overall, rates still remain at high but stable levels
  • An equipment shortage in Asia remains a challenge, however, some equipment is opening up at the higher spot-market levels
  • Rates out of Europe to North America have been increasing.  Demand continues to remain at elevated levels due to a shortage of containers.  Many vessels are full up to 5 weeks in advance of departure date.  This strong market is also expected to continue through the end of Q1
  • Rates out of North America to Asia increased, however, North America to Europe rates have remained steady.  Chassis availability at nearly all US ports and rail ramps is extremely tight
  • Booking is recommended 5 weeks in advance for Europe to North America
  • Booking is recommended 3 weeks in advance in the following lanes:
    • Asia to Europe
    • Asia to North America
    • India to North America
  • Booking is recommended 10-14 days in advance in the following lanes:
    • North America to Asia
    • North America to Europe


Air Freight:

  • Asia:  China volume is ramping up after a slow post-Chinese New Year (CNY) start.  Rates continue to climb, especially out of Shanghai.  Other Asia markets, such as Taipei and Bangkok, are also showing strong demand amidst a shortage in capacity
  • Europe:  Rates remain at very high levels as capacity continues to be constrained, mainly driven by the automotive and pharma industries during quarter end
  • Americas:  US exports continue to outgrow the available capacity to Europe, LATAM and Asia.  Carriers are reporting high load-factors and are seeing capacity booked out as far as 5-7 days


Parcel:

  • 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 with those continuing to rise)
  • FedEx will continue charging the following Peak Surcharges (effective until further notice):
    • $30 Peak Oversize
    • $3 Peak Additional Handling
    • $0.75 SmartPost Surcharge
  • UPS will also continue charging the following Peak Surcharges (effective until further notice):
    • $31.45 Large Package
    • $3 Additional Handling
    • $0.30 Ground Residential and SurePost Surcharge
  • 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
  • DHL eCommerce has been able to secure more and more volume from SurePost and SmartPost
  • The USPS continues to experience fewer capacity issues than UPS and FedEx due to the government subsidization of equipment
  • While some of the major regional providers such as OnTrac and LaserShip have temporarily staved off new volume, they have performed well during the pandemic and they are expected to experience some additional growth after peak.  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.

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.