Unprecedented LTL volumes, hot markets, and strained capacity are in the forecast for summer.
The second quarter is nearly over, and with Fourth of July just around the corner, now’s the time to get your trucks in a row.
Here are the key insights shippers need to know heading into July:
- Unprecedented LTL volumes continue to strain truck capacity and service levels.
- Freight volumes show no signs of slowing down.
- With the July Fourth holiday approaching, LTL and truckload capacity will significantly tighten towards the end of June — so place your orders now.
- It’s especially important to plan ahead if you’re shipping within super-hot markets (like California, Dallas/Fort Worth, or Houston), where we’re seeing load-to-truck ratios of up to 10:1.
- As always, shared truckload (STL) shipping remains the optimal mode to unlock capacity and guarantee high service levels in a crunch.
Let’s break these insights down further.
No surprise here: Extreme LTL volumes are putting a strain on capacity.
The LTL craze continues — YRC has reported nearly a 15% increase in LTL shipments per workday for Q2 2021 compared to Q2 2020. From a gains perspective, Old Dominion has reported over a 47% increase in daily revenue when comparing May 2021 to May 2020 (thanks to a 28% increase in LTL tons per day). While these statistics point to increased profits for LTL carriers, there simply aren’t enough trucks on the road to keep up with demand — putting shippers in dire straits.
Here’s what this means for shippers:
- Service will falter as LTL carriers work to keep up with increased demand — and these carriers continue to be extremely selective with the shipments they accept.
- With demand far exceeding capacity, shippers are in a bind: They can settle for lower performance or risk not having their goods moved at all.
- Lastly, LTL rates continue to rise to compensate for increased demand and limited supply.
Here’s what you can do:
- Choose a better LTL option by partnering with a multi-modal, solution-oriented logistics provider like Flock Freight. We put our shippers first — that means when customers book our standard LTL service, we pair you with a dedicated Account Manager to ensure a seamless delivery from Point A to Point B. Plus, we’ll always try to pool your freight and upgrade it to a smarter, safer, and faster shared truckload shipment (for free).
- Or, avoid the LTL crunch altogether by tapping into the TL network. Flock Freight’s shared truckload service, FlockDirect, leverages the truckload carrier network to move less-than truckload freight, unlocking a brand new market of capacity for LTL shippers.
- When service is a must, opt for FlockDirect. LTL shippers can increase service levels, eliminate damage, and neutralize freight’s environmental impact with guaranteed hubless shared truckload shipping. Shipments that move FlockDirect never hit a terminal and never leave the trailer until delivery, thereby decreasing shipping time compared to standard LTL and drastically reducing the likelihood of in-transit damage.
Freight volumes remain strong on the heels of increased consumer spending and inventory restocks following bottlenecks in the supply chain — and the July Fourth holiday promises to exacerbate capacity issues.
With coronavirus restrictions declining and more people confidently leaving their homes, retail sales surpassed $388 billion in May. Consumer demand shows no signs of slowing down in the summer months, meaning shippers will need to continue pushing out products at rapid speed.
Following the severe inventory depletion we saw as a result of last year’s panic-purchasing early in the pandemic, manufacturers have struggled to catch up to normal inventory levels. Inventory-to-sales ratios remain historically low. As we’re now halfway through 2021, it’s clear that inventory issues will persist into 2022.
Though many retailers remain far from meeting demand, certain sectors (like general merchandise and household goods) are overcoming last year’s supply chain bottlenecks and getting closer to reaching pre-pandemic inventory stock levels.
Here’s what this means for shippers:
- With high consumer spending and steady inventory to move, freight volumes aren’t slowing down anytime soon.
- That means LTL and truckload capacity will continue to be tight, peaking at the end of June as shippers race to place orders before the July Fourth holiday.
- With shippers and receivers alike closing for the federal holiday, transit times and rates will increase for orders shipped right before the weekend.
Here’s what you can do:
- Plan to ship any time-sensitive orders as early as possible in June (as in, today) to avoid delayed transit due to facility closures.
- Freight demand and shipping rates will peak the week of June 29 to July 2 as shippers work to meet holiday demand and get end-of-month orders off their docks. Placing your orders before then will provide greater cost savings.
- Converting your partial shipments (that may otherwise move in a truckload) to shared truckloads will lower your shipping costs while maintaining service quality.
Lastly, if you’re shipping out of California, Dallas/Fort Worth, or Houston, data shows that you’re facing a tougher market than most: the load-to-truck ratio is roughly 10:1.
If you’re shipping in these markets, we recommend choosing high-speed, technology-optimized, hubless shared truckload shipping with FlockDirect. Flock Freight taps into the truckload carrier network to move your shared truckload shipments, thereby solving the LTL capacity crunch and skipping the damage-prone hub-and-spoke network in one fell swoop. Our patented algorithms enable a smarter way to ship — we pool your partial freight with that of other shippers, eliminate unnecessary stops, remove gas-guzzling trucks from the road, and deliver exactly at the time you choose.
That’s it for this month — get out there and finish June strong by placing your time-sensitive orders today. We’ll be back in August with fresh market insights for the rest of summer. Stay cool, and enjoy the holiday weekend!
Chance Jones, our Senior Pricing Analyst at Flock Freight, leverages 12 years of freight industry experience and simplifies market conditions to help you navigate the ebbs and flows of pricing, capacity, and service.