With Los Angeles remaining the largest recipient of trans-Pacific cargoes, southern California has become one of the tightest truck markets in the country.
All-in dry-van spot rates in the highly liquid Los Angeles-to-Dallas lane have climbed steadily from $1.12/mile in April to $3.04/mile by the first week of September, according to Truckstop.com. FreightWaves Outbound Tender Rejection Index (OTRI) showed an increase from 1.2% to 27% over the same period.
Other parts of the country are also experiencing tightening truck capacity. Spot rates from another benchmark lane, Chicago-to-Atlanta, have jumped from $2.14/mile to $2.93/mile over the past month, with tender rejection rates for Chicago climbing from 13.6% to 20% during the same period.
Unlike 2019, where many imports entered the country and sat in warehouses, this freight is moving throughout the U.S. as demand for certain products has jumped due to consumer lifestyle changes.
Electronic and household goods continue to experience double-digit growth as Americans spend more time at home due to COVID-19. Athleisure has replaced business casual on the apparel front. These pandemic-induced consumer trends will continue to shake up U.S. importer inventories in the months ahead.
The bookings illustrated in the Ocean Shipments Report are orders that have expected departure dates over the next seven days. For shipments to the U.S. West Coast there will be a two- to three-week transit time before they reach the ports. This means that freight will not be on a truck until late September at the earliest. The index has shown consistent year-over-year growth during the past few weeks, meaning that the flow of freight will not stop from the international side.