Trucking spot markets are pricing in coronavirus infection rates

03/20/2020

Producción, Instalación, Logística

Source: freightwaves.com

Truckload carriers are charging more to drive into regions of the United States with high coronavirus infection rates. 

Trucking spot markets – ad hoc, same-day and next-day transactions to move freight – are extremely sensitive to exogenous factors, reacting within days to hurricane forecasts, labor disputes or untimely harvests. But this is the first time we’re aware of when an infectious disease outbreak has affected specific lanes in United States freight markets.

The three regions seeing the most volatility in spot prices and capacity availability correspond to areas most affected by coronavirus: Seattle (68 deaths in Washington); New York City (20 deaths in New York); and San Francisco and Los Angeles (16 deaths in California).

According to truckstop.com, dry van rates including fuel from Los Angeles to Seattle jumped 9.6% this week compared to the week prior. While volumes have softened somewhat in the Seattle market, you’d have to go back to mid-October 2019 to find equivalent outbound volumes. Truckers are rejecting 12% of loads inbound to Seattle, one of the highest levels in a year.

Camión, Semi, Tractor, Contenedor

Rates from Dallas into Los Angeles are up 27% since the lane bottomed in early February, but volumes have softened significantly in the past week. 

New York City, one of the centers of the coronavirus epidemic in the United States, is becoming a less desirable destination for truck drivers, especially for less-than-truckload (LTL) carriers. LTL freight is high-touch, and requires the driver to enter and exit his truck more often, sometimes making inside deliveries.

“Some LTL carriers are embargoing parts of New York for the NBG Service Center due to the total number of cases of coronavirus in these zip codes: 10801, 10802, 10804 and 10805,” Transplace CEO Frank McGuigan wrote in a blog post yesterday. ”Some LTL carriers have implemented a COVID-19 policy including no longer taking signatures at delivery, social distancing 6-10 feet, and not performing any inside deliveries until further notice. Some LTL carriers are embargoing certain shipments to Philadelphia as the city of Philadelphia is only accepting goods for 11 ‘essential business’ types that will remain open.”

Camión, Camión Semi, Semi-Truck

Indeed, carriers are rejecting more loads into the Elizabeth, New Jersey market, which contains the Ports of New York and New Jersey and has been a reliable source of freight this year. Tender rejections for loads inbound to Elizabeth (ITRI.EWR) are at 16% compared to 13% for the rest of the country. 

More than ever, drivers are concerned that the rush of consumer demand for food and beverage and consumer packaged goods is leaving shippers unprepared. Wait times have soared, and videos of extreme congestion and lines at distribution centers are circulating widely on social media.

Even richly priced spot loads are being rejected by owner-operators if freight brokers cannot verify set appointment times and reasonable detention pay.

“Brokers, this is why I turned down a $4.18 per mile load today,” owner-operator Chad Boblett wrote in the Facebook group Rate Per Mile Masters, posting a cell phone video showing a seemingly never-ending line of trucks outside of a distribution center in Indianapolis. “Screw that crap about you will be worked in with no appointment at the shipper.”

Semi-Truck, Transporte, Camión Semi

Weekly average wait times across the United States are at 159 minutes, a record level, but keep in mind that FreightWaves SONAR calculates that number based on when trucks enter a facility; the time spent waiting on a street outside of a facility’s geofence will not be recorded as a ‘wait time’ in the SONAR platform. Some markets are struggling with congestion more than others: wait times in Atlanta have reached 277 minutes; Oklahoma City is at 297 minutes; and trucks in Philadelphia are waiting an astonishing 322 minutes to be loaded and unloaded.

© 2019 Worldfreightrates News