Weekly Market Brief 

63,200 individuals in the United States tested positive for COVID-19 in a single day just last Thursday. That is a record. Since the rise in infections are mostly in southern states such as Texas, Georgia, Arizona, and Florida, panic-buying is returning and capacity is tightening in these areas. Adding even more stress to the market is this week's arrival of the annual DOT road inspections. 

Like the famous words of Captain James T. Kirk, we are boldly going “where no man has gone before,” and I am not talking about the outermost regions of space. I am talking about right here on terra firma. Sure, we’ve had plagues and pandemics before, but never with the population, economy, and intricate network of transportation and travel that we have in the 21^st century. It is a brave new world, alright, and we are scrambling to adapt and adopt.

Luckily, adversity is the mother of invention, and it is evident in the way we as humans are adapting to the global pandemic. Shippers who are lucky enough to be manufacturing are facing serious challenges, such as working with reduced staff, dealing with volatility in order patterns, finding a need for alternate sourcing, and navigating around unclear government regulations that differ from state to state. Despite the chaos, freight keeps moving, and shippers are finding new and sometimes better ways to get the job done.

2019 was a Shipper’s Market

Record truck orders and record freight volumes in 2018 served as the backdrop for a significant correction to the market in 2019. The year began with a plethora of trucks and freight volumes underperforming expectations. It is estimated that there are approximately 75,000 more tractors available than there is freight to fill them.¹ Shipments became easier to cover, and as a result, carrier rates were historically low. Even though economic growth continued in an upward trajectory, it was at a much slower pace than the previous year and not enough to compensate for the overabundance of equipment.

Is the Freight Market Recession Improving?

This quarter’s market trends report got me thinking about the perpetual ups and downs of the transportation industry, and naturally, yo-yos – a cool invention that I fondly remember from my childhood. I haven’t seen a yo-yo in years and naturally assumed that the toy went the way of marbles and Tiddlywinks. What child (ahem, or adult) would want to play with a spool and a string when they have smartphones, tablets, and gaming technology? After doing a little research, I found that yo-yos not only have an impressive back story, they are still a relevant child’s toy. But more on that later.

The latest trends and shifts affecting the transportation/freight market.

According to economists and supply chain experts, this year’s freight market will be nothing like last year. The further we get into 2019, the more the forecasters are changing their predictions for economic growth, expecting less growth than originally stated.

The latest trends and shifts affecting the transportation/freight market

After coming down off the bull market of 2018 when unparalleled economic growth resulted in record-high rates and short capacity, January may have been a disappointment for some. Lower than last year's record success, the manufacturing sector is experiencing a steady 3% growth rate, year-over-year at present. That might sound disheartening, but keep in mind, this is the traditional “slow" time of the freight year and it is still growth. If you’re worried about our economy, take notice of other countries, like Europe, who are seeing a much more drastic decline in economic prosperity with Brexit looming and tariffs of their own to worry about. The truth is, the whole global economy is slowing down.

Back to the Future, and How to Beat Biff

Want to know what's going on in the transportation and logistics industry?  Choptank shares firsthand what's happening regarding recent trends, changes in rates and fuel, capacity insights, and more in its monthly report.  Ship & Transport #Market Report_April/May 2018

Want to know what's going on in the transportation and logistics industry?  Choptank shares firsthand what's happening regarding recent trends, changes in rates and fuel, capacity insights, and more in its monthly report.  Ship & Transport #Market Report_1217 

Curious about what's going on in the industry with wildly fluctuating prices and capacity all over the map?  Check out our recent transportation industry market report.