The Weekly Freight Report for September 9th, 2021

1. Class 8 truck orders up 91% YoY as carriers plan for 2022

Now that OEMs are accepting orders for 2022 delivery of Class 5 through 8 trucks, fleets are jockeying for build slots ahead of what is expected to be another robust year for freight. Don Ake, VP of commercial vehicles for FTR, estimates that Class 8 truck orders will continue to be substantial through the end of 2021. Although production challenges, including semiconductor scarcities, might limit production capacity, the hot freight market means carriers have no intention of scaling back vehicle orders anytime soon. But truck manufacturers are cautiously taking more orders… here’s why.

2. Transportation jobs increase by 47,000 in latest BLS report

Transportation and warehousing firms added 47,200 employees in August, according to BLS data. Industry employment now tops 5.747 million—the highest since February 2020. Long-distance trucking employment was down 5,900 jobs while local trucking employment increased by 20,600 positions. Logistics managers already dealing with tight capacity face navigating drivers’ self-reallocation as the toughest holiday season yet approaches.
Check out the full employment report here.

3. Capacity continues to dip as prices soar

The Logistics Managers’ Index (LMI) increased 560 basis points to 40.5% in August. The U.S.’s transportation capacity is steadily decreasing even as consumer demand for products increases across the board. The warehousing prices index remains at an all-time high of 88%, even as warehouse utilization slowed its growth by 420 bps to 66.3%. But a negative feedback loop of Q4 stockpiling, tight capacity, shipping delays and higher carrier prices could negatively impact peak season.   

How long will the supply-demand dynamic last? Read more.

4. Three factors defining the freight industry right now

The Cass Truckload Linehaul Index recorded a record high of 146.5 in April. Industry experts expect linehaul rates to continue increasing as consumers demand everything from groceries to furniture be delivered to their door ASAP. Three main trends will define carriers’ ability to stock their shelves: the labor market, improving last-mile services while containing costs, and adopting more sophisticated real-time delivery tracking tools.

Check out the details of this assessment. 

5. Global asset slowdown won’t ease until volumes drop

Despite an increase in deployed containers, carriers are operating at reduced actual capacity thanks to offshore asset circulation delays. Multiple supply chain shocks have lengthened average on-terminal dwell time for ships at LA-Long Beach from 3 to 5 days. The average container return time for trans-Pacific voyages has increased 50 to 60 days. Meanwhile, carriers are charging record spot rates of $30,000 or more per container because demand continues unabated. Read about the reasons for the gridlock.