Uber Freight

Seasonal loosening breaks 4-month trend of increases in carrier spot rates

November 20 / US

A loosening freight market helps shippers recover from early-COVID struggles

Rising COVID-19 cases and ongoing natural disasters over the past several months have driven tighter capacity, higher rates, and an increased dependence on spot freight. After months of shippers navigating a tight market, shippers and brokers saw some signs of softening in the beginning of October as spot volumes cooled off, load-to-truck ratio decreased, and carrier spot rates declined modestly. While many shippers brace for a spike in rates as the holiday season approaches, the October market brought a sigh of relief for shippers wary of ever-increasing transportation costs. 

Carrier rates finally dropped after 4 consecutive months of sequential spot rate inflation

Nationwide van rates had increased steadily since June as shippers tried to keep pace with erratic consumer demand in a tight market. As people grew more comfortable with in-store shopping and in-restaurant dining in October, however, load-to-truck ratio decreased and relieved upward pressure on rates from Uber Freight carriers.

After a seasonally typical month-over-month increase of 4.9% in September, rates in October dropped for the first time since May. Uber Freight’s Southwest and Southeast regions saw decreases in carrier rates of 8.6% and 4.1%, respectively. These were slightly offset by rising rates of 4.7% and 4.2% in Uber Freight’s Midwest and Northeast regions, respectively. 

Spot volume fell in a seasonally loose month

Shippers spent August and September scrambling to restock inventory driven by e-commerce’s ever-increasing share of total retail sales and to distribute essential supplies in the face of natural disasters. In October, spot opportunities dropped across the country by 17.2% on average. After an 8% increase the previous month, spot volume in the Northeast decreased by 30.3%, the largest difference of any region in October. Even the Southeast, which battled Hurricane Delta early in the month, saw a spot volume decrease of 10.9%—the smallest decline of any region, but sizable nonetheless.

Facility ratings and dwell times remained flat 

After marginal improvements the previous 2 months, October facility ratings and dwell times both held flat nationwide. The average national facility ratings were up 0.2% to 4.28. This has been the national average since midsummer, signaling better carrier experiences in this relatively relaxed market with more manageable load-to-truck ratios and less congested facilities. Although October’s average dwell times of 130 minutes were more than 5% longer than in May, they have steadily declined since July. 

The flattening numbers indicate a more balanced freight market in October. With the busy holiday season approaching, shippers were finally able to recover somewhat from an extremely tight summer and enjoy a more relaxed month in the October spot freight market. For November, we’re expecting season tightness to return, carrier rates to increase sequentially, facility ratings to come down, and dwell times to move upward once again. 

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