Create a free Overdrive account to continue reading

Freight volumes reach pre-COVID levels as 2020 roller coaster rides on

user-gravatar Headshot
Updated Jul 9, 2020

Load availability has surged in recent weeks, particularly for dry van and reefer loads, as lifted shutdown orders have jump-started retail sales and as produce season has spiked demand for reefer haulers. Even flatbed has seen some strength via a stronger-than-anticipated construction season.

Truckstop.com, for instance, says load availability jumped 31% last week from the week prior, continuing an eight-week run of growth, spread across the three major truckload segments. The board’s load-to-truck ratio over the past two weeks was stronger than the same weeks in 2019 and topped the five-year average for those weeks of the year.

However, analysts expect a return to annual seasonal trends, meaning July and August are likely to see a cooling period for freight demand and rates, thus continuing the dramatic up-and-down cycle experienced throughout 2020.

“The spot market roller coaster continues,” said Ken Adamo, DAT’s chief of analytics. “The restocking boom shot per-mile rates up,” he said, in late March and into early April. Then, “social distancing and shuttering of the economy brought things down in early May,” he said.

But freight demand has since seen a recovery, with Memorial Day weekend acting as a “kickstarter,” said Jim Nicholson, vice president of digital brokerage Loadsmart. Load volumes this June have in fact outpaced the same time period of the past two years. He expects that strength to continue through the usual Independence Day time frame.

“We’re on a very solid run here,” said Stephen Bindbeutel, an analyst at Truckstop.com and the company’s vice president of product. “All signs are cautiously optimistic,” he said. Though rates are lagging behind the growth in freight demand, Bindbeutel expects per-mile averages to grow in the coming weeks. Last week, spot rates on average climbed 2.2%, he said.

Retail sales, which were up 18% nationally in May from April, have been one of the main drivers of the short recovery period. Though major chains like J.C. Penny, J. Crew, Neiman Marcus and Pier 1, among others, have announced bankruptcies, other retailers are booming.