Uber Freight

Carrier supply shows slow recovery while shippers prepare for the holidays

October 28 / US

Across the country, shippers are continuing to navigate a freight market that’s been unseasonably tight since July. Some trends featured in Uber Freight’s monthly reports that have persisted since spring—such as low retail inventory-to-sales ratio and an increasing shift to spot freight—have become longer-term features of the industry.

Now shippers are gearing up for an extended holiday season where brick-and-mortar sales are potentially limited by local safety regulations, and e-commerce sales are expected to surge.1 In September, carrier capacity showed a slow but steady recovery after a significant decline this summer, but shippers are still facing increasing rates across modalities, according to data from Uber Freight.

Spot volume remained high as shippers worked to meet consumer demand

Overall rates in September were up nearly 5% compared with August, a more tempered increase from previous months. Reefer rates rose across regions as grocery stores continued to keep up with consumer demand; the Southeast and Northeast in particular experienced nearly 20% increases month over month. With the exception of the Southwest, dry van rates also rose across the country, with the Northeast and Midwest seeing rates increase by 11%. 

Spot opportunities continued to reflect a tight market. The Northeast and the Midwest saw increases of 8% and 15%, respectively. Despite continued natural disasters in the Southeast (Hurricane Sally hit the Gulf Coast on September 16), the number of spot opportunities decreased by 6%. In the Southwest, that decline was more drastic at 13%, which deviates from 3 months of increasing spot volume in the region. 

Average reefer rate changes by region month over month, 2020

Carrier supply began to increase after summer lows

Back in April, near the start of the pandemic, a double-digit surge in carrier capacity drove rates down. This increase was led by larger fleets, many of whom took on essential loads to keep supplies and food moving and drivers employed. In the summer, capacity took a significant dip across fleet sizes, though owner-operators remained largely steady during this time of imbalance. 

Social distancing protocols at CDL driver schools and increased health risks for drivers due to COVID-19 have contributed to tighter capacity this year, despite the spot market growing more lucrative for carriers. Additional factors such as increased operational costs shouldn’t be discounted. Carriers increasing their spot volume mix can be deemed higher risk when renewing insurance policies, which can be another limiting factor for carriers during a spot-heavy market.2 Since the lows of July, carrier supply has been slowly eking upward, but access to a broad-reaching, reliable carrier network remains critical for limiting tender rejections and maintaining a resilient supply chain.

Facility ratings held steady, despite dwell times falling

September was the second month in a row where average national facility ratings only shifted marginally, with a national increase from 4.26 to 4.27. Facilities in the Southwest had an average rating of 4.34 in September, which marks 3 consecutive months of being the highest-rated region in the country. Dwell times dropped an average of 1.2 minutes everywhere except the Southwest (which is at odds with its high facility ratings), with the Southeast in particular improving dwell times by 4% month over month. 

This is the sixth 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.

1CBRE, 2020 US Retail Holiday Trends Guide, October 2020.

2Transport Dive, “Why trucking insurance premiums are on the rise,” August 31, 2020.