In large part, on the spot market anyway, 2020 has been a tale of two seasons, as many owner-operators and small fleets have experienced first hand in their own dealings.
The ghost town that befell spot freight for a roughly two-month run amid shutdown orders due to the COVID-19 outbreak in April and May has since rallied into something of a boom town.
After rates cratered in April and May, the subsequent supply chain chaos combined with a boom in demand for loads-producing goods like appliances, homewares, home-office-wares, exercise equipment and lumber, to name a few hot commodities, has poured freight into the spot market.
That surge in load volumes has driven per-mile spot rates to those on par with some months in 2018 — considered by many to be the spot market’s recent-history high-water mark. The good news is load volumes are expected to remain strong on the spot market at least through year’s end, layering the holiday retail rush on top of the already-robust retail sector.
The bad news is that, underneath that retail surge and supply chain chaos, a lingering weakness in the industrials and manufacturing sectors could remain a drag on prominent freight-producing sectors in the economy.
Should the retail spending cool, and industrials and manufacturing not pick up, freight volumes could again hit a down cycle.
“Structurally, it becomes a question mark,” said FTR CEO Eric Starks, referring to retail carrying the economic recovery. “Can this type of strength continue? I have been one of the more pessimistic people out there” regarding the pandemic’s impacts on the economy. “I’m waiting for the data to show up and say ‘It’s all good, and we’re back to normal.’ But so far, I haven’t seen that.”
