MARKET UPDATE - OCTOBER

As the Global Economy continues to show improvement overall, we have seen varying effects on the pricing and capacity in the market, especially as it relates to capacity in the international market:


Trucking:

  • Spot Load Postings also continued to remain nearly double for the same month in 2019, as supply chain disruptions have pushed shipments over to the spot market
  • Spot market rates are in their longest continual rally in 5 years
  • Tightness in the trucking market is expected to continue, primarily due to 3 main factors:  driver turnover, declining capacity and increased volume/demand
  • National rates for van, flatbed and reefer all climbed from August to September.  Van rates saw the largest average increase at about 7%.  The national average for rates remain at their highest levels since July 2018


Ocean:

  • We are starting to see increases in some lanes, including Asia to North America and Asia to Europe, where GRIs were implemented in mid-September
  • Rates for Europe to North America, India to North America and North America exports appeared to be holding steady
  • Capacity remains tight in the majority of lanes
  • Booking is recommended 3 weeks in advance in the following lanes:
    • Asia to North America
    • Asia to Europe
    • Europe to North America
    • North America to Asia
    • North America to Europe
  • Expect to book 14 days in advance from India to North America


Air Freight:

  • China:  As shipping has picked up with several new product launches, rates have started to rise with spot rates at $6.00+/kg
  • Asia Other:  Hong Kong rates have not felt the pressure of those ex-China, however, some lanes out of Southeast Asia, such as out of Taiwan, have seen a huge jump in cost
  • Americas:  US export lanes have remained steady, however, the industry still struggles with limited capacity
  • Europe:  Capacity remains stable both on the Transatlantic and Far East lanes, however, it is anticipated that the upcoming peak season could be quite strong and put additional strain on pricing from Asia
  • The industry is expecting additional capacity constraints one 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), along with some increases to those charges that took place on August 30
  • FedEx and UPS continue to charge additional “peak” surcharges that were added in June, to include additional costs on items like Large Package/Oversize, Residential Delivery and SmartPost/SurePost packages
  • FedEx and UPS have both announced their 4Q peak surcharges that will begin in early October through mid-January.  As with 2019, these will include additional charges for Additional Handling, Oversize/Large Package and Over Max/Ground Unauthorized.  In addition, both carriers will be adding 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 has 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
  • E-commerce demands remain at elevated levels, although the commercial market has bounced back considerably from the April lows.  Parcel shippers had to make adjustments for the much higher ratio of residential and last-mile deliveries.  This has also led to numerous shippers looking at alternate solutions to manage capacity, such as using regional providers like LaserShip and OnTrac, or even focusing on postal-type services such as USPS, UPS Mail Innovations or DHL SmartMail


Data2Logistics has a dedicated “Professional Consulting Services” team that can help you identify opportunities across all modes.  We provide various services such as Parcel Cost Management, data metrics/analytics, market assessments, carrier strategy/negotiation, etc. For more information, please contact Gary Arnold, SVP Global Business Development, at gary.arnold@data2logistics or 330-324-4263.