More than a year has passed since the COVID-19 pandemic became a serious problem in the U.S. and supply chains were shaken to their core. The freight market, though, is still reeling. Truckload rates have been a wild ride, and it doesn’t look like brakes will be pressed any time soon.
The fall 2021 freight outlook shows truckload volume on the rise. By the numbers, year-over-year freight volumes are expected to be up 13% in 2021’s third quarter. Capacity will likely continue to be tightened as good drivers are still hard to find. Increasing freight volumes for ocean and air shipments will also continue to drive domestic freight transportation needs, especially as peak season approaches.
Are you ready to dive into the details? Get a better view of what freight market conditions will look like into the Fall of 2021. From peak shipping season to what’s driving truckload rates, see what’s in store for transportation management.
Traditionally, peak freight shipping season begins in August and runs through October.
This is the prime time for freight movement thanks to simple supply and demand. Late summer and autumn are the times of the year when consumers are in demand of a lot of products, from back-to-school gear to holiday gifts and decorations. The demand for consumer goods, as well as the late-summer produce season, makes shipping demand skyrocket.
Peak season can extend beyond the fall months, too. It all depends on what the market demands. Agricultural and industrial production can surge at other times of the year, driving up the freight market, too.
2021’s peak shipping season might look a little bit different than peak seasons in years past, though. The economy is much stronger as peak shipping season warms up now than it was a year ago. Both manufacturing and consumer demands are rising. This means freight brokers and carriers are seeing volumes increased as peak season gets closer.
Freight rates certainly rise during peak season.
What makes freight rates go up during peak season? Just like with other markets, truck markets and shipping prices are driven by supply and demand. More trucks are needed during peak season so demand goes up. The supply of trucks available to move freight has remained stagnant, so supply goes down.
For shippers, peak season comes with higher spot rates and increased lead times. The key to shipping freight during peak season is planning ahead. Those who ship on dedicated lanes might avoid some of the headaches of rising freight rates during peak season with locked-in contract rates.
Freight capacity issues will continue to drive up prices in the Fall 2021 freight outlook.
Unfortunately for today’s shippers, high freight rates are here to stay. According to information from ACT Research Cass Shipments Index reported in May 2021, freight volumes are expected to rise 13% over last year in the third quarter of this year.
The increased volume, combined with continued tight truck capacity, means that freight rates will very likely go up in Fall 2021.
Let’s look at what’s driving freight prices to see how rates are determined and what the extra shipment volume will do to costs.
There are a number of factors contributing to rising freight prices. Things that point to rising prices for the Fall 2021 freight outlook include:
Let’s explore each of these contributing factors with a bit more detail to give you a better picture of why prices are rising on the truckload spot market.
The COVID-19 pandemic set the economy on a tailspin. As restrictions are lifting and vaccinations become more prevalent, the economy is recovering from a tank as bad as anything since the Great Depression.
The economy is once again thriving and production is increasing. However, supply chains remain slow or even broken and some companies are struggling to keep up. A growing economy and struggling supply chains are putting more and more demands on FTL and LTL carriers, driving freight prices up.
2021 was a bizarre time for the economy. Consumers were panic-buying goods in bulk in April, when the economy faced a sharp downtown immediately after.
Rising freight prices will look even more extreme when examined as year-over-year comparisons. Most economic factors, including truckload rates, are just now reaching pre-pandemic levels as Fall 2021 approaches.
A perfect storm of conditions is leading to a major backup at West Coast ports. The problem is concentrated on the San Pedro Bay near Los Angeles and Long Beach but stems north to Seattle Port as well.
Cargo ships are arriving at West Coast ports, but the berths are so crowded the ships can’t dock to unload. They simply wait for available space, which slows shipments and causes a logjam in the bay. The traffic jam at the ports is caused by container shortages, tight truck capacity, a growing number of imports, and other logistical bottlenecks.
Remember back in March when a massive ship was stuck in the Suez Canal? The Ever Given blocked this essential canal from March 23 to March 29, 2021, and the shipping world is still recovering.
More than 200 ships were halted when the Ever Given was stuck, which caused a serious backlog of cargo shipments. In fact, carriers are still playing catch up as Fall 2021 approaches.
Many crops grow all spring and summer. They are ready for harvest, processing, and transport right as peak season heats up.
Abundant growing seasons across the northern portion of the U.S. will likely lead to even tighter truckload capacity and higher ground transport rates as we look ahead at the Fall 2021 freight outlook.
The factors above add to market volatility, and ultimately, price increases for freight shippers. This doesn’t mean you’re stuck dealing with the growing prices. Learn about 15 easy ways to reduce freight costs and see where you can make cuts.
Major economic indicators can also play a role in shipping prices. However, these economic factors (sales to inventory, industrial production, imports, and consumption) all point to post-pandemic recovery.
In the shipping industry, consumer spending or consumption might be the most important thing to examine. Why? Consumer spending influences industrial production, which heavily influences truckload shipping.
As Fall 2021 approaches, reports suggest that consumer spending is up about 11.8% -- almost to pre-pandemic levels. This means the demand for freight shipping is up and leveling out.
The economy is on the up and up, but there are a few trucking trends forecast for the rest of 2021. Let’s look at a few things the transportation industry might face as we look at the Fall 2021 freight outlook.
Two major trends in truckload shipping might include:
Let’s look at what these trending topics might mean for shippers.
Data from U.S. Xpress suggests there are about 200,000 fewer truck drivers on the road in 2021 than there were before the pandemic took hold. Many drivers took a break during COVID and haven’t returned to the road, making capacity even tighter.
Lessened capacity and increased shipment volumes mean one thing: increasing freight rates. You’ll likely see the increase strongest on spot rates and contract rates.
You might be able to find a 3PL partner to help you move your shipments on dedicated lanes. This can help you cut costs and avoid the volatile spot market.
Despite the volatile Fall 2021 freight outlook, one thing holds true and steady: it takes a strategic partner to get your goods on the road. Endure the freight trends and keep your shipping budget in the black with USA Truckload Shipping, powered by R+L Global Logistics, right by your side.
USA Truckload Shipping, powered by R+L Global Logistics, go do the legwork as a full 3PL partner. No matter whether you need truckload shipping, fulfillment and distribution, a customs bond, or any other related service, we have partners ready to get the job done.
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Freight rates are projected to rise 13% in 2021's Q3.
Yes, peak season reduces truck capacity and drives up prices.
Yes, shippers can expect to see both spot quotes and contract rates go up in Fall 2021.