On this episode of #WithSONAR, co-hosts Luke Falasca and Kyle Taylor discuss why the freight bull market may hold the current elevated levels through the end of the year.
Luke and Kyle also look at how SONAR freight volumes reflect consumers’ new buying patterns and where those patterns are likely to head.
Watch the episode below:
This year has just been unprecedented in so many ways.
First, the bullish move in freight is going to continue. While many focus on the fact that the volume of freight has increased, it should also be noted that changes in volume obviously change demand and capacity.
According to SONAR data, the bullish case for freight will likely continue through the end of 2020. And this was a prediction that FreightWaves’ CEO Craig Fuller made months ago.
Now, other sources are starting to catch up with Fuller’s mid-April prediction. A number of sell-side analysts and research companies are now saying the opposite of what they said a couple of months ago. They previously predicted that the volume of freight would taper off. Now they are saying that the increased volumes will last and therefore there will be a continued – and perhaps increasing – demand for trucking capacity.
Another key point is that new drivers aren’t entering the market fast enough to replace drivers who are retiring, or those who have been caught by the new drug and alcohol clearinghouse, or simply are leaving to do something else. New drivers could not get training earlier this year when the educational facilities were closed due to COVID-19. When the lack of new drivers is paired with the increased volume of freight, there is an all-time high demand for trucks. Almost nationwide, the number of tender rejections tracked by SONAR is much higher than 2019.
Dry van rejection rates are at about 25% nationwide and reefer rejection rates are above 30% nationwide. And while flatbed rejection rates are much lower than dry van or reefer rejection rates, they are trending upward.
Freight volumes continue to rise, so there is continued tightness and capacity.
One of FreightWaves’ writers interviewed key representatives from several of the large carriers. And they all commented that the demand to move freight is tremendous. So carriers have opportunities to move freight, but not enough drivers to fill all the truck seats. Quite simply, carriers need more drivers.
In 2018, drivers’ wages increased because there was a shortage of qualified drivers. There may be more of that occurring as carriers increase salaries and/or incentives to lure drivers to their companies.
SONAR includes driver turnover percentage data provided by the Truckload Carriers Association (TCA). This particular dataset is lagging data; one month old. In August, the turnover rate in the fleets surveyed by TCA was 152%.
Factors such as market volatility, freight volume at record amounts and a continuing shortage of qualified drivers, mean that the freight markets change daily; rates per mile change constantly.
So whether you receive SONAR data through an API, over your computer network, on a laptop, telephone or tablet, it is the most up-to-date data available and can help you navigate all the changes that will continue through the fourth quarter of 2020 and beyond.
Know more, faster – and find just what you need #WithSONAR!