Spot Rates Spike in the Trucking Industry
Updated: Sep 14, 2020
You’ve probably already heard the impact COVID-19 is having on store shelves. People have gone into panic-mode; panic buying everything and emptying isles to prepare for a national quarantine that may or may not happen. The fact that some people are unable to find places to buy water or toilet paper is alarming, however, the surge in freight that the trucking industry is seeing as a result of restocking store shelves puts the spot market in both an unprecedented and precarious position.
The freight market is currently seeing increased spot market activity, rates, and margins due to the demand to restock shelves. There’s no way around it - the isles of empty shelves, frantic crowd of shoppers, and constant barrage of crisis news stories are haunting. While there’s nothing good about a pandemic or the suffering people will feel over the coming weeks, truck drivers don’t have to sit helplessly on their hands. While everyone else is “Social distancing” truck drivers are taking action. Hospitals are reporting shortages of medical masks; retailers and manufacturers have a surging demand for everything from toilet paper, to hand sanitizer, to non-perishable food items; and truck drivers are the people that need to deliver it.
According to FreightWaves’, the OTRI (Outbound Tender Rejection Index), stood at 9.76% on Monday, the highest it’s been since the start of 2019. For more information on the surging trucking demand, click here. Roughly 70% of the country’s goods are transported by truck, which makes it impossible for freight to stop moving in times of crisis. This is why the FMCSA suspended the hours of service rules in order to aid essential goods to be delivered. With consumer goods like cleaning supplies toilet paper flying off shelves, the demand for trucks to move freight to store shelves has increased sharply, creating an increase in tender rejections.
With all the unknowns in a time like this, it is important to remember that America still needs truck drivers. And with the surging demand that we are seeing, that need won’t stop for a while. Take advantage of the high rates and do what you do best: fuel the nation.