MARKET UPDATE - NOVEMBER

As the holiday peak season is upon us, capacity should continue to further tighten across the globe, impacting rates and services:

Trucking:

  • Spot Load Postings for October 2020 were double those of October 2019, as supply chain disruptions continue to push shipments over to the spot market
  • Load-to-truck ratios increased in the last week of October after dropping for 4 weeks straight, indicating that capacity should be tightening as we head into the main peak season
  • National rates for van, flatbed and reefer may have only climbed between 1-2% from September to October, however, the industry did see an all-time high for van rates in October
  • With peak holiday season upon us, load-to-truck ratios are expected to continue climbing back up, which could put additional pressure on the spot rate market
  • Many trucking companies, especially in LTL, appear to be near or at capacity, causing several to shy away from additional business with their larger customers

Ocean:

  • GRIs for Asia to Europe and Asia to North America are anticipated for early November, while rates in most other trade lanes are expected to hold steady
  • 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
    • Europe to North America
  • Booking is recommended 10-14 days in advance in the following lanes:
    • Asia to North America
    • North America to Asia
    • North America to Europe
    • India to North America

Air Freight:

  • Asia:  Essentially all Asia origins are in peak season and rates have spiked to $8-$9 per kg from Asia to the US.  Capacity is extremely tight, but carriers are holding space for last-minute spot buying.  Capacity issues are expected to remain through December
  • Americas:  US export lanes to Asia and Europe have remained steady, as there seems to be a good balance between demand and capacity with no real spikes in demand.  There has been a spike in demand on LATAM destinations, however, rates remain minimally impacted
  • Europe:  While there is almost no available capacity from Asia to Europe, Europe to Asia has plenty of capacity with reduced rates.  Europe to US remains in a peak-scenario and rates have increased
  • The industry is expecting additional capacity constraints once a COVID-19 vaccine is finalized and needs transporting around the globe

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)
  • FedEx and UPS ended their “temporary” peak surcharges, as they have both now implemented their standard 4Q peak surcharges that began in early October  and run through mid-January.  As with 2019, these include additional charges for Additional Handling, Oversize/Large Package and Over Max/Ground Unauthorized.  In addition, both carriers have added a peak surcharge for Residential Delivery starting in early November through mid-January.  For UPS, those can range as high as $4 and for FedEx they can reach up to $5 per package
  • FedEx and UPS have both announced their General Rate Increase (GRI) for 2021.  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
  • With record volumes from spikes in e-commerce activity, capacity during peak season is expected to dwindle and become increasingly expensive (whether that is from the additional peak surcharges or the need to shift to a faster service to ensure timely delivery).  This is also leading to numerous shippers looking at alternate solutions to manage capacity, such as using regional providers like LaserShip, LSO and OnTrac.  Even the postal-type services such as USPS and UPS Mail Innovations are at capacity, to the point that even DHL E-commerce has had to start refusing additional peak business
  • UPS and FedEx have started capping the volumes from some of their larger customers, or even asking some to reduce their volume


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, benchmark/market studies, carrier strategy/negotiation, etc…  For more information, please contact Gary Arnold, SVP Global Business Development, at gary.arnold@data2logistics or 330-324-4263.