By Cain Adams
Trinity Logistics/Longboard Logistics
If you negotiated contracts based off December freight rates, then you may want to have a little talk with the broker or carrier you negotiated with. Most lanes will be headed down in pricing.
We expect rates to drop about 10 percent over the next few weeks and look like rates back in August of 2020. We also expect Florida to come on soon and start shipping. Florida will then be a bit easier to ship into.
We also expect Dallas to be a bit easier to ship into because freight volumes coming out of that area are ticking up. More trucks will be picking up than dropping off so that will attract trucks to the Dallas market.
Weather will be a factor in both the upper and lower hemispheres. http://weather.com/ said the hills above Los Angeles could even see a bit of snow while the Rockies were expected to get up to two the weekend of Jan. 23-24. And the Sierras were expected to see three to five feet in some mountain passes, which would slow some trucks down and possibly close some passes.
We are seeing McAllen starting up, and shippers should watch the area to see how the weather takes shape. We booked three loads on Jan. 21, and all three cancelled due to not being able to cross product. We do not know if it was weather or just not enough product. When heavy rains come into the valley, pricing goes down because there isn’t enough product to sell. When weather is good, product can come in and rates can go up pretty fast. The week of Jan. 25 we expected to see more volume for sure.
A big factor we will need to take a back seat on is “How will people spend their stimulus checks?” And will it affect the spot market again?
Contract loads are going to start up and take some equipment away from the spot market capacity. We now have to see what happens next. If consumers click and ship, then we could see rates bounce back up. If they pay their bills, we will see rates become a bit steadier.
The first 100 days of President Biden should be watched as well. Mandatory masks are being imposed on Federal lands and buildings. Everyone will be watching to see if the virus numbers go down. Schools are going to open up a bit more too. This is kind of counter active, but it seems to be the plan. It’s really a waiting game. Tick tock, tick tock.
In 100 days we should be looking to see if restaurants and public meeting places start to open. If this happens, supply chains will make some changes from off-premise, retail, to more on-premise, restaurant needs. We think those states who are politically blue would see the greatest swing. They have been locked down tighter and sure to party.
We hope you are all safe, still making memories with your loved ones and taking care of yourselves. The next 100 days could be make-it or break-it – not politically but rather just from a point of consumer confidence. We can’t keep printing money, but we can all keep shipping, being fair to one another and continue to make calls to sell product. The faster we can all turn a dollar, the stronger our economy becomes. Stay safe out there and cheers!