News The Holiday Rush in Trucking and it's Aftermath

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At the end of every year, retailers scramble to clear out their excess holiday inventory. This leads to an increase in shipping demand from October through December as retailers seek to move their goods from warehouses to stores around the country. This annual peak season provides truckers with a much-needed boost of business before things begin to slow down for the winter months.

But this dynamic can lead to an oversupply of trucks once the fourth quarter ends because many carriers add extra capacity on top of their usual fleet size in anticipation of increased demand. When shipments slow down after the holidays, supply often outpaces demand, leading to a decrease in spot rates. In 2022, this decrease was observed when truckload spot rates hit $1.67 on Nov. 17 according to FreightWaves' National Truckload Index.

Market Stability Indicators​

Despite signs that indicate a potentially soft first quarter due to overcapacity, there are also signs that suggest otherwise. For starters, tender rejections have been decreasing since hitting 15% on Nov 10th and are currently hovering around 8%. Additionally, channel checks have revealed that large shippers have begun booking more volume for January through March than they did last year at this same time. These figures seem to indicate that we could be seeing stable freight markets heading into 2021 which could mean that carriers will not experience as much turbulence as they usually do during first quarter lulls.

Conclusion​

The indicators seem to point toward stabilization even though we are entering what is traditionally considered “the lull” time frame for carriers each year - first quarter 2021 could be different this time around! We will have more clarity by mid-January when most of these trends become more evident; until then all we can do is watch and see how things develop over these next few weeks as we move into 2021! Whether or not carriers experience a typical first quarter slump remains up in the air but data and channel checks certainly suggest otherwise! Stay tuned!