Shippers should plan to only ship the most necessary freight this week as capacity is sure to tighten leading into Thanksgiving as it does nearly every year. Be prepared to work harder and pay more for freight that absolutely has to move this week. It should be noted that two out of the past three years, rejection rates have declined after Thanksgiving. So it may be a sound decision to wait until next week to push freight if possible. Do not expect significant easing between the two major holidays, but more of a window where capacity is slightly more available. Paying slightly more to guarantee service may be worth it, but know that no carrier can control the weather or traffic conditions; be mindful of the weather in any lane you are moving freight this week, especially as a major storm is forecast to trek across the upper Midwest into the Northeast to start the week.

SONAR Ticker: OTRI.USA Seasonality View

It is a foregone conclusion that truckload capacity is expected to tighten significantly over the next week. Interestingly, demand appears to have declined over the past week, which may be a sign that many shippers have planned for the upcoming weeks being some of the more difficult to navigate. Lead times have been unseasonably on the rise for the last few months, indicating shippers are more aware of the challenges of securing capacity than ever. Regardless, national rejection rates are back on the rise after about a two-month decline – even as tender volumes ease. Drivers will be coming off the road and will be increasingly positioned closer to their domiciled locations over the next two weeks, which will pull them out of some of the heaviest outbound locations. This is already apparent in southern California where rejection rates have already hit multi-month highs. Capacity has also tightened in areas like the Pacific Northwest where harvests and Christmas tree moves have pushed spot rates to historical highs.


I recommend checking out FreightWaves’ writeup of the annual RailTrends conference, which took place last week in New York. The quotes from that FreightWaves article that stand out to me are those from Larry Gross, president and founder of Gross Transportation Consulting. He said that the share of freight movement held by intermodal in the third quarter was the lowest in almost 12 years – and that intermodal has given back all of its market share gains since 2009. While those are discouraging comments from a true intermodal expert, I found comments from both Schneider National and Hub Group on their most recent analyst calls to have been somewhat encouraging – both domestic intermodal providers noted that railway fluidity has improved in recent weeks.

To help monitor intermodal network fluidity going forward, I recommend using the daily, and very granular, intermodal volume data contained in SONAR. In contrast to typical seasonality (October is typically the peak intermodal volume month), daily domestic intermodal volume increased 2% in November from October and is now running roughly in line with year-ago levels. I believe that increase reflects improvements in railway fluidity and more transloading of imported goods from international containers to domestic containers on the West Coast.

For the week ahead, one major development to watch is the terrestrial AIS tracking providers for Chinese ports, which provide the most accurate updates on container vessels and their ETAs, ETDs and current locations. These tracking providers have temporarily suspended their service to ensure they are not in violation of the Chinese government's new data privacy policy that is currently being implemented. While it is likely that these data providers will return to service in the near future, this temporary blackout could last for weeks and create even more trouble for shippers, forwarders and ocean carriers by reducing their visibility into where their vessels/shipments are. This is likely to put even greater pressure on capacity, which in turn, may put even more pressure on spot rates. Already, capacity has been under extreme pressure because of the large number of container vessels caught in-line waiting off the coast of major U.S. ports. Even though volumes have tapered slightly (with many now reporting year-overyear declines) at many of these ports of origin in China, the reduction in available capacity from the vessels waiting in line, coupled with the delays encountered by carriers from the blackout in terrestrial tracking providers, could cause rates to increase slightly through the end of the year.


This week was packed with economic releases, and retail sales maintained monthly momentum increasing 1.7% in October as consumer activity remained elevated in the midst of rising inflation. The personal savings rate is now back at pre-pandemic levels; the personal savings rate hit all-time highs with federal stimulus deployment earlier this year and in 2020. The current rate of growth for retail sales will ease in the coming months but the moderation will be at an elevated level. Industrial production was also updated last week, showing a gain of 1.6%. Both retail sales and industrial production peaked in the quarterly rate of growth earlier this year and will in 2022, but will continue to feed freight volumes in the coming months.

Economic releases will be pulled into Wednesday in the coming week due to Thanksgiving, including durable goods orders, consumer spending, new home sales, initial jobless claims, and consumer sentiment. Durable goods orders will be watched closely to see what type of appetite for capital goods expenditures businesses will have in the final quarter. Flatbed capacity remains elevated and suggests that raw materials and manufacturing goods are still flowing throughout the country.


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