Signs of Truckload Freight Market Shift in Time for Holiday Season

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For the first time in over a month the Morgan Stanley Truckload Freight Index (TLFI) increased and showed signs of life.

Demand increased and outperformed seasonality. Supply decreased and outperformed seasonality.

With “constructive discussions” between US and China pushing the Dow Jones to record highs, there are several signs of the market making a shift in time for retail and holiday peak season.

Despite this index report, some brokers are observing different conditions:

"Capacity (supply) is higher than demand; as a broker we have much less difficulty gaining power for our loads than six months ago and especially a year ago. Overall capacity has to shrink for the carriers to be able to elevate the rates, except in a few lanes where they didn't fall as far recently." -Broker, Morgan Stanley's Truckload Sentiment Survey (TLSS) Respondent Commentary

...And some brokers are seeing shippers hedge their lane assignments for the long-haul:

"As we are experiencing "bid season" currently, we're starting to see a number of shipper clients hedge their carrier lane assignments in a way that supports sustainable fit versus cheapest pricing. This is hopefully a good sign for carriers and brokerages as we head into 2020." -Broker, TLSS Respondent Commentary

Some shippers are seeing lower rates but are weary of the economic implications:

"I'm fooled again. Rates have dropped with both brokers and carriers. It is nice for the budget, but worries me as to the national economy's conditions. Stable to growing would be nice." -Shipper, TLSS Respondent Commentary

In this environment of higher demand and lower supply, we typically see higher freight rates as a result. As the below chart shows, LeanCor is holding firm with a prediction of increased year-over-year rates in the mid-to-high single digits by the second quarter of 2020.

Bi-Weekly Truckload Update: 10/31/2019 - 11/13/2019:

truckload-market-update-nov-2019


 

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Posted by Steven Prince, Transportation Manager at LeanCor

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Results-driven logistics and transportation leader with expertise in carrier procurement and performance improvement, pricing, safety/rules compliance, strategy development, and supply chain implementation

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