MARKET UPDATE - MAY

Shippers continue to face several challenges in the global transportation market.  Below are highlights of recent market trends and information by mode:

Trucking:

  • Spot Load Postings were down almost 26% from March to April 2021
  • Spot Load Postings for April 2021 were around 5 times as many compared to those from April 2020 (April 2020 activity was near an all-time low)
  • Van, Flatbed and Reefer load-to-truck ratios were up exponentially in April 2021 as compared with April 2020 (Flatbed ratio was up over 1600%)
  • In April 2021, spot rates were up over 50% compared to April 2020 in all 3 equipment types.  Flatbed once again reached all-time highs, while dry van and reefer hovered around their near record-high levels from March
  • Diesel fuel remained at elevated levels, as it has increased 31% 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:

  • The 2021 Trans-Pac contract season is starting off with higher congestion and demand than ever.  Rates out of Asia to North America are continuing to increase on nearly all lanes.  The US East Coast is the most heavily impacted due to the fallout from the Suez Canal blockage.  Carriers have limited inland bookings due to extreme bottlenecks at rail yards
  • For Asia to Europe, capacity remains severely reduced as a result of the Suez Canal situation.  Significant rate increases have been seen across all carriers
  • Rates out of Europe to North America continue to increase.  Capacity is expected to remain very limited through at least the end of Q2.  Shippers are facing port congestion and are having to be flexible in their routings
  • Rates out of North America to Asia are increasing with GRIs anticipated from all major carriers.  Chassis availability at nearly all US ports and rail ramps remains extremely tight.  Vessel congestion is being seen at both US coasts
  • Booking is recommended at least 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 14-21 days in advance in the following lanes:
    • North America to Asia
    • North America to Europe


Air Freight:

  • Asia:  Asia exports remain at extreme peak levels, with rates for some origins approaching those seen back in May 2020.  Flights are expected to be full through at least the end of May, with current market conditions expected to continue through June
  • Europe:  Export demand continues to be very strong to the Americas and Asia, as no meaningful capacity was added and carriers continue to report very high load factors
  • Americas:  US export capacity remains limited due to lack of belly availability as no real capacity has been added.  The West Coast to Europe lane is facing some major constraints, while the Midwest and East Coast to Europe are more manageable.  Flights to Asia are filling quickly with dry-cargo perishables


Parcel:

  • In early April, both FedEx and UPS announced they were bringing back the late shipment recoveries, or Guaranteed Service Refunds (GSRs), for next day services only
  • 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).  Both FedEx and UPS increased their surcharges on the China/HK to US lanes
  • 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
  • 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
  • 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.