Shippers and carriers should expect rising rates for the peak holiday retail season.
Chicago (Aug. 20, 2019) – With last year’s record high truckload market rate inflation followed very quickly by this year’s record lows, Coyote Logistics announced today the next installment of its Coyote Curve® forecasting model. This update projects a return to the inflationary year-over-year spot truckload market environment for 2019’s peak holiday season and beyond.
The Coyote Curve shows the market is continuing to drop further and faster than predicted, with the Spot Market Index closing Q2 at -24.9%, which is -2.4% lower than Coyote’s Q2 forecast projected. However, supply-and-demand indicators demonstrate that the market is at an inflection point where demand is starting to increase again and, in turn, will drive rising spot market rates heading into the busy Q4 months.
The 2017 and 2018 market caused a lot of pain for many truckload shippers as rates jumped to historic highs. We believe 2020 has the potential to create very similar challenges for shippers,” said Coyote Chief Strategy Officer Chris Pickett.
“This year, we’ve seen a complete 180 from the market, leading to difficult times for many carriers who may have overshot their truck orders and plans based on the previous year’s more favorable economic conditions.
Coyote’s goal with these quarterly market updates is to help both shippers and carriers understand where we are in the market cycle, where the data shows us it’s headed in the near future and what they can do to position themselves for success no matter the market condition.”
While guidance suggests that spot truckload rates are likely to begin rising, the Coyote Curve does not expect the 2019 peak holiday season to be as impactful on overall spot market rates and service levels as usual, due to the current deflationary market.
However, surge capacity challenges often exacerbate other supply chain complexities. Those challenges will still cause retailers to look for creative capacity solutions – such as power only, leased trailers and mobile storage – to help manage their volume spikes.
During a August 22 webinar, Pickett and Chief Network Solutions Officer, Nick Shroeger, will detail additional findings of the Q3 Coyote Curve, including:
- Q2 and Q3-to-date truckload market performance;
- Whether or not truckload rates are rebounding;
- Adjusted forecasts for the high-volume months ahead; and
- Surge capacity and high-volume shipping best practices for peak retail season.
Learn about market conditions from industry experts.
Find out why last quarter’s market update received 5-star ratings from shippers and carriers across industries and regions.
The Coyote Curve measures three concurrent cycles – seasonal demand, annual procurement and more elusive market capacity – to help supply chain professionals identify recurring patterns that can lead to better informed supply chain and logistics decisions.
The Curve, as first featured in the May 2018 issue of The Journal of Supply Chain Management, accurately predicted the U.S. truckload market’s current deflationary environment, which left companies unprepared when tightening capacity peaked and began deflating late 2018.
Visit the Coyote Curve resource center for more information and to view an on-demand replay of the August 22 webinar.
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Media Contact for Coyote:
Corporate Communications, Coyote