Why Shippers are Set for a Seasonal Period of Stability

Spring has arrived, bringing with it a season of stability for shippers. In March, there was an abundance of capacity in the market, resulting in a large supply that bucked typical trends. Although dry van and reefer rates may be down, flatbed rates are increasing due to an increase in construction projects.

In this month's market update, we will discuss the present state of the industry, and possible factors that could affect it in the near future.

Key Highlights

• March's seasonal demand increase was relatively stable due to low demand and a surplus of capacity in the market.
• For shippers, there were historically low tender rejections, large supply, and excellent service from transportation providers.
• Dry van/reefer rates are down, but flatbed rates are rising as construction season begins.
• Normalization of truckload capacity is likely, with construction driving volumes for the short term.
• Consumer confidence is indicated by initial jobless claims remaining close to pre-pandemic levels, which should prevent a sudden drop in truckload demand.

Looking ahead, we can expect to see a normalization of truckload capacity as construction drives volumes for the short term. And as the world moves further away from the pandemic era, consumer confidence remains high, indicated by initial jobless claims that have remained close to pre-pandemic levels. This bodes well as it suggests we are unlikely to experience a sudden drop in demand for truckload services.

Despite the current stability in the market, the industry still faces potential challenges. Rising fuel prices in the summer months could lead to an increase in shipping costs, while changes in regulations and tariffs may present additional obstacles. The outlook for truckload demand and supply continue to be the primary indicators to monitor. This is due to the fact that capacity normalization has yet to fully materialize.

Overall, we're looking forward a seasonal period of stability at least while capacity continues its trajectory to normalization. As this continues to unfold, there is some vulnerability to distruptive events. However, it's unlikely to cause long-term disruption as we move into the summer months ahead.

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Logstives Moves is written by Joshua Hoelker , Senior Logistics Account Executive with Total Quality Logistics, one of the largest logistics providers in the United States. He brings years of know-how and expertise to the table in order to help shippers drive operational excellence with a comprehensive suite of services for both domestic and international shipping needs. His philosophy is focused on providing clients with a “cradle to grave” approach with an added touch of creativity to ensure the satisfaction, service and success they deserve.

Interested in working together? Send him a message to get started.