Freight volumes are steadily surging, which have made many in the industry breathe a sigh of relief. However, rates are still suppressed, which is potentially due to the fact that the movement of goods is for warehouse and inventory redistribution rather than consumer-facing activity. Freight volumes during COVID has been a hot topic of discussion for many carriers.
Likely Factors Contributing To The Surge
"According to Joy Hanawa, Thunder Funding's Chief of Analytics, "We've seen a nice rebound in volume and freight rates in June. This is good news for our customers. Freight rates are still impacted by lower fuel prices, but carriers are getting busier."
Load availability has increased in recent weeks, especially for dry van and reefer loads, as lifted shutdown orders have kickstarted retail sales and the summer produce season has spiked demand for refrigerated reefer haulers. Even flatbeds have seen some growth thanks to a stronger-than-anticipated construction season.
Interestingly enough, retail sales were up 18% nationally in May from April, which was one of the biggest drivers of the short recovery period. Major chains like J.C. Penny, J. Crew, Neiman Marcus and Pier 1, among others, announced bankruptcies, while other retailers have experienced massive increases in business.
Home improvement giants like Home Depot and Lowe’s as well as sporting goods retailers have enjoyed huge spikes in sales. Not surprisingly, home office furnishings sales in the form of chairs, printers and monitors have soared.
Carriers with Diverse Freight Sources Are Weathering The Storm
In the contract freight market, it’s no surprise that reefer loads have weathered the downturn better than other types of freight. The food and beverage sector has remained steadily active throughout the economic slowdown while other sectors like manufacturing have significantly slowed or stopped completely. Carriers with diverse sources of freight have clearly been able to ride out the impact the pandemic has had on the economy better than those focused on a niche that has screeched to a halt.
Check back with the Thunder Funding blog for additional information on COVID-19 and its impact on our nation's truck drivers.