Uber Freight

Key signals that the freight industry is showing signs of recovery

June 9 / US

Though we are a long way from being on the other side of the crisis caused by the COVID-19 pandemic, Uber Freight’s most recent data and research tell a story of recovery in the freight industry.  

We’ve begun to see the market stabilize after months of volatility with rates and volume beginning to climb upwards. Carrier tools like bundles have seen a sharp increase in usage and shippers are embracing digital operations to cut down lag in their supply chains. With produce season kicking off and states and cities reopening, shippers and carriers alike should continue to experience relief over the next coming months. 

Demand climbs as produce season kicks off and states ease restrictions

Uber Freight van vs. reefer spot opportunities sequential month-over-month

Reefer loads between February and April showed higher highs and lower sequential lows, indicative of the initial impact of the shelter in place mandates. By May, reefer demand began to tick back up as produce season kicked off and cities began opening up. 

According to DAT, these factors along with increased port activity increased reefer load-to-truck ratio, while van load-to-truck ratio remained low given sparser capacity, stricter equipment requirements, and more one-way shipments.

Uber Freight Food & Beverage vs. non-Food & Beverage spot opportunities sequential month-over-month

Throughout the crisis, food and beverage shipments have been more volatile when compared to other verticals. Meanwhile, non-food and beverage spot opportunities exhibited a more moderate increase following a smaller peak at the onset of the pandemic. Across the board, we’ve seen freight volume slowly build as some states begin to ease shelter-in-place restrictions, and as more states follow suit we expect to see non-essential freight volumes continue to grow. 

Carriers embrace time-saving tools as rates tick upwards

Rates are finally looking up across service lines, increasing ~6% in the first couple weeks of May after the soft market placed enormous strain on carriers. It’s a positive sign that the industry is recovering from months of volatility and April’s soft market. 

Carriers also maximized earnings by taking advantage of an increase in bundles opportunities on the Uber Freight app. We continue to see strong growth on bundle bookings in May, after a surge in April, amounting to more than 100% growth in just two months.

Facility experiences begin improving with lower dwell times and higher ratings

Improvements in dwell times and facility ratings signal a slight recovery as we head into the summer. Dwell times now sit just 3 minutes above the pre-COVID-19 average, and facility ratings have risen slowly but surely throughout May. Reduction in dwell time means fewer loads in which shippers owe detention to carriers. While the West Coast continues to lag behind New England, facilities across the country have made steady improvements that we expect to continue through the summer. This high-volume California beverage facility represents the larger trend we’re seeing.

Weekly load volumes and average dwell times at a high-volume California beverage facility. 

Uber Freight’s real-time pricing eases marketplace friction for shippers 

API volume is now up over 100% compared to pre-pandemic activity. Pricing transparency continues to ease marketplace friction as APIs enable shippers to get prices and move loads in seconds. We expect API volume to remain high in June as more shippers digitize their operations and prioritize APIs in their long-term load planning strategy. Early adopting shippers who were API-connected before the onset of the COVID-19 pandemic and who have since embedded real-time pricing at the core of their load planning strategy have sustained the largest API volume increases throughout the pandemic. 

The market is changing every day, and in a pandemic, every second counts—even when the market is stable. And while climbing rates and volume show signs of positive recovery in June, no one can predict quite what that will look like. Digital tools will remain critical for shippers and carriers alike in order to maximize utilization, remove friction, and increase the speed of their operations. These priorities will only continue through the summer as produce season and eased restrictions drive the market toward recovery. 

This is the second in a series dedicated to understanding supply chain pressures caused by COVID-19, drawn from trends Uber Freight is observing across our own marketplace.