Truck market seems tight for near term
The 2020 transportation market has had its twists and turns, and the bumpy ride isn’t likely over yet, Bob Rose believes.
Rose, San Mateo, Calif.-based vice president of national sales for the Allen Lund Co., said the market has been unpredictable and abnormal.
Right after the COVID-19 pandemic began in mid-March, the truck market was disrupted as foodservice movement slowed to a halt and shipments to retailers exploded.
At the time, the U.S. Department of Agriculture reported a severe shortage of trucks, with a rating of 4 out of 5, where 5 is the maximum shortage.
Truck rates also spiked in mid-March, reaching $2.92 per mile average for refrigerated loads, according to the USDA.
Rates retreated to $2.66 per mile by April 21 and then jumped to over $3 per mile at the end of June.
“I don’t think there’s anybody that could put a computer model together that would anticipate something like this,” he said.
More recently, the truck market has grown from fairly quiet to fairly tight across most of the country, Rose said, including the West Coast, Texas and the Northwest.
“This is a weirdly unprecedented year.”
More shippers are putting loads on the spot market because their contract carriers haven’t been able to react to the market changes fast enough, he said. Volume of loads has been way up for the Allen Lund Co., he said, even as margins have been somewhat under pressure.
“For just strict availability, it’s pretty tight in most places in the country,” he said.
The businesses that need trucking have been reshuffled, Rose said, noting the continuing absence of typical foodservice demand.
While there are many variables that could change expectations, Rose anticipates firm truck markets through the end of the year.
“If you would have told me four months ago, I would have said this looks like it’s definitely recessionary from a tracking standpoint,” he said.
With a safety road check in September that will pull trucks off the road for a short period, Rose said truck availability may continue tight in September and beyond.
“I do think it’s going to be relatively tighter than in the past through the end of the year, and maybe a bit beyond.”
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