Similar to last month, we are still well below usual shipping activity during this time of year; however, we continue to see signs of improvement.
4 Things for Logistics Professionals to Know This Month:
- There are more positive signs that the market is trending upwards.
- The FMCSA approved 4 changes to driver hours-of-service regulations.
- July 4th is coming up, which could contribute to truckload market volatility.
- Produce season is heading north as we get deeper into the summer.
Let's dive deeper into each topic.
As the Country Slowly Opens Up, So Does Demand
Though we are still in the depths of a deflationary market, we have definite signs that the volume, demand and spot rates have come off of the bottom.
In our most recent quarterly Coyote Curve® update, we noted that although our proprietary spot index was tracking at about -9% year-over-year, it was still much higher than the -25% it hit in the first week of May.
We also saw some slight sentiment improvements in our latest monthly Insights poll from both carriers and shippers.
Carrier Survey Respondents:
- Though 86% thought it was more difficult, it's a 5% decrease vs. April (91%)
- May's "Much Easier" respondent total increased 6%
Shipper Survey Respondents:
- Sentiment is moving towards the center, with "Significant Reduction" decreasing 7% vs. April, "Slight Reduction" increasing 3%, and "No Change" increasing 5%
Consumer Survey Respondents:
Consumer optimism also continues to grow. This is a positive sign for more stable consumption, which is a leading indicator to increasing truckload volume.
According to the most recent Consumer Brands Association survey, 76% of respondents said they are optimistic about the next 6 months and the United States’ ability to find a treatment or vaccine, reopen the economy and resume normal activities.
Long story short: though the truckload market — and the economy in general — are still far below anything approaching typical levels, we now have several weeks of evidence from multiple sources that the worst is most likely behind us.
The FMCSA Is Making Changes to Driver Hours of Service
On June 1st, the Federal Motor Carrier Safety Administration (part of the U.S. DOT) approved four changes to the final rule regulating driver hours of service (HOS).
These four tweaks to existing regulation have the net effect of increasing flexibility for carriers. Specifically, here are the areas they addressed:
- Sleeper berth provision
- 30-minute rest breaks
- Adverse driving conditions
- Short-haul/air-mile exemptions
The HOS changes will go into effect on September 29th of this year.
We spoke with the UPS VP of Public Affairs to get more insight on what was changed and what it means for shippers and carriers. You can learn more about HOS changes here.
July 4th Is Right Around the Corner
The next big summer shipping holiday is the 4th of July. With even more of the country opening up compared to Memorial Day, shippers will be pushing to get products in the stores now in preparation for increased consumer activity.
We typically see heightened food and beverage shipping activity in the Thursdays and Fridays leading up to the holiday (June 18th, 19th, 25th & 26th) and tighter carrier capacity in the immediate aftermath (July 6th, 7th), as drivers enjoy time off with family and friends.
Though the market is currently in a deflationary state and there is generally enough carrier capacity to meet demand, expect more volatility in the spot market in the coming weeks.
Produce Season Continues to Move North
We're still seeing active spot markets in the usual suspects (Florida, Texas and California) but Arizona, Nevada, Alabama and Georgia are in full produce season swing too.
Up next, we'll start to see more produce-related demand out of the Pacific Northwest and the Midwest. Expect to experience a little more volatility for short-notice shipments out of these markets, especially with the holiday right around the corner.
Need Help with Anything?
Look for another market update in July. In the meantime, read more of our coronavirus resources to help your business keep moving forward.