National freight markets were much looser this May than last year as carriers rejected just 4% of tendered loads. June will present more opportunities for the savvy shipper as carriers will be aggressively trying to make up for any potential losses resulting from a softer than anticipated May. The wild card is whether freight volumes recover swiftly and where they originate. Uncertainty around U.S. trade policy has already driven new pull-forward freight north from Mexico and has the potential to distort markets in the Southwest and Southeast. Even though conditions are optimal for shippers at the moment with readily available capacity, the pendulum can swing the other direction quickly in what is typically the hottest month for freight in terms of volume.
We don’t think using last year’s data to forecast expected trucking prices will be helpful, but basic seasonality should still be predictive of the general direction of rates. National volumes increased roughly 1.67% after Memorial Day to peak in late June in 2018, with a lot of the increase occurring in the third week of the month. We expect a similarly shaped pattern this year, albeit at a lower magnitude. Shippers need to see a decent increase in volume as the long-term impact could mean another 2017 moment when the market shifts again. Market volatility to the low side is just as difficult to manage as it is to the high side since capacity has already started bleeding out of the market.