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Seasonal easing returned through the back half of April, but rates barely softened as elevated tender rejections continued pushing freight into the spot market. By month-end, it was clear that an elevated rate floor had been set heading into the peak summer shipping months.
As expected, capacity conditions tightened quickly as the market ramped up for CVSA Roadcheck Week. Tender rejection activity started climbing roughly a week ahead of the annual event as carriers pulled capacity off the road to mitigate inspection risk. In turn, the dry van rate per mile jumped by record-setting levels from May 5 to May 12, displaying a significantly sharper increase than the same period last year.
The lingering impacts of Roadcheck Week are now coming into focus, with the weeklong capacity event creating a backlog of freight that will take time to clear. That pent-up volume combined with accelerating produce and summer peak season demand is making capacity both difficult and expensive to source nationwide, and conditions will only grow tighter as pre- and post-Memorial Day volatility sets in over the coming weeks.
On the broader demand side, manufacturing activity, imports and consumer spending continue pointing toward relatively stable freight volumes through the summer months. That, along with mounting seasonal freight pressure and persistently elevated diesel prices, will continue forcing budget-strained shippers to lean on the spot market.
The next several weeks should provide the best test yet of how quickly supply can absorb the disruption as we progress through the 100 Days of Summer shipping season, and given the market’s response to Roadcheck Week amid existing supply-side challenges, a meaningful rate respite appears unlikely to arrive until at least after July Fourth.
The demand environment remained relatively stable in April. Contract volumes softened, but much of that decline appeared tied to greater spot utilization amid routing guide disruption. Imports declined slightly yet remained historically elevated.
Imports should hold steady over the coming months as back-to-school and fall retail inventory preparation begins. With the 100 Days of Summer set to commence Memorial Day Weekend, produce volume, summer bottled beverage demand and Roadcheck-related backlogs should all support near-term freight activity.
Capacity softened but remained sensitive through the back half of April. Conditions then tightened quickly in early May as carriers began sidelining trucks ahead of Roadcheck Week.
The impact of Roadcheck-related disruption is expected to create a multi-week normalization process as backlogged freight, out-of-position equipment and tightening seasonal demand all add pressure to an already strained supply market. Ongoing challenges like high operating costs, aging equipment and intensifying regulatory enforcement will also continue to weigh on capacity heading into the 100 Days of Summer.
Rates largely held firm through the back half of April even as capacity softened. That stability quickly gave way to renewed volatility in early May, when truckload rates posted significant increases across all modes during the opening days of Roadcheck Week.
April and May rate movements suggest the market has established a new floor. Rates are expected to remain elevated as shippers work through Roadcheck-related backlogs while seasonal produce and summer freight demand continue ramping up in the coming weeks. Volatility and pricing pressure are likely to last through the 100 Days of Summer and into early Q3.
Economic activity remained steady through April. Manufacturing activity expanded again, with the PMI index holding flat while new orders accelerated and backlogs increased. Consumer spending also grew year-over-year while positive job growth pointed to broader labor market strength.
Current economic indicators suggest the demand environment should remain steady in the near term and receive a meaningful seasonal boost as shippers prepare for the Memorial Day push and start of the 100 Days of Summer.
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Matt Pyatt is the Chief Executive Officer of Arrive Logistics. He co-founded Arrive with President Eric Dunigan in 2014 after building his career at Command Transportation. As CEO, he is responsible for overseeing the company’s financial health, strategic vision and culture, as well as building a scalable leadership team to support Arrive’s growth.
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Scott Sandager is the Chief Administrative Officer at Arrive Logistics. He joined Arrive in 2018, bringing over 14 years of logistics and brokerage experience, with expertise in project and change management, organizational design, talent development and customer satisfaction. Scott previously held many diverse roles of increasing responsibility with AFN, a Chicago-based freight brokerage.
Eric Dunigan is the President of Arrive Logistics. He began his career at Command Transportation before co-founding Arrive with Matt Pyatt in 2014. As president, he is responsible for driving revenue and growth, as well as leading the Strategic Partnerships team — a veteran group of supply chain experts who work with Arrive’s customers to reimagine their shipping strategy.
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David Spencer is the Vice President of Market Intelligence at Arrive Logistics. David joined Arrive in 2017 after spending six years at AFN focused on business intelligence. His department provides critical market data and expert analysis to internal teams and publishes monthly market updates for shippers and carriers under the Arrive Insights banner.
Andrew Clarke is Board Chairman for Global Critical and DCLI, Inc., and a board member for Arrive Logistics and Element Fleet Management Corp. His 20 years of global transportation and logistics experience include time as CFO of C.H. Robinson, CEO of Panther Expedited Services, Inc. and SVP and CFO roles at Forward Air Corporation.
Dean Croke is a Market Analyst at DAT Solutions, where he focuses on freight market intelligence and data analytics. His 35 years of experience with data analytics, transportation, supply chain management, mining and insurance risk management include time as co-founder of FleetRisk Advisors and in a number of other high-level roles with FreightWaves, Spireon, Lancer Insurance, Omnitracs Analytics (formerly Qualcomm) and more.
Asanka Jayasuriya is the CTO at 8VC. He is an accomplished engineering and product leader with 20+ years of experience in the cloud. He has a strong background in enterprise SaaS, PLG products, infrastructure, and security. Notably, he served as CTO and SVP of Engineering at SailPoint, leading their successful transition to the cloud and successful exit event. He also held senior leadership roles at InVision, Atlassian, and Amazon, driving growth, operational excellence, and innovation. At 8VC, Asanka works with the entrepreneurs and leaders in our portfolio as a virtual CTO supporting their growth.
Chad Eichelberger is the President of Reliance Partners. Since 2015, he’s leveraged his extensive experience in risk management, compliance, best practices and contracts to lead the company’s logistics and truck insurance strategy and operations. Chad was previously the President of Access America Transport, where he led the company from $8M to over $600M in revenue.
Barry Conlon is the CEO and founder of Overhaul, the global leader in active supply chain risk management and intelligence. With a remarkable career spanning over 30 years in supply chain security, he is widely regarded as a trailblazer in modern-day supply chain security standards and best practices.
As VP and Senior Analyst at ACT Research, Tim analyzes commercial vehicle demand and alternative powertrain development (i.e. electrification), and authors the ACT Freight Forecast, U.S. Rate and Volume Outlook. He previously spent fifteen years in equity research focused primarily on the transportation, machinery, and automotive industries, and co-founded leading equity research firm Wolfe Research.
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