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Monthly Forecast

We expect capacity to tighten throughout the remainder of 2019, albeit not to the extent we saw a year ago. The fundamental difference is in the direction of the freight market, which was in the process of cooling after a heated 18 months. Spot rates have been sideways through much of the third and fourth quarters but are elevated over 1H levels. We expect volumes to trail off after the first few weeks following Thanksgiving but there will be less capacity available as drivers are dispatched into smaller regions in order to be home for the holidays. Spot rates will be very unstable during December, especially as service windows tighten.

Some of the more volatile sectors to watch this month will be around the Midwest and Northeast as retail inventories move around the major metro centers where a majority of the consumption takes place. Note that those regions are also prone to sudden and severe winter weather events. The Northeastern corridor has already seen a surge in overall freight volumes this year due to shippers’ growing preference to import through the East Coast. Carriers avoid this region due to higher cost of operation and low mileage runs — be prepared to pay more for December spot capacity in that region.

Monthly Recap

National tender rejection rates — the rate at which carriers reject load requests from shippers — hit a ten-month high at the end of November. This indicates that capacity was the tightest it has been since January when the market was still recovering from an overheated 2018. The 7.8% rejection rate is still loose compared to all of 2018 but significant due to the fact that the value was much higher than the summer peak that occurred around the 4th of July (when it hit 6.24%). Many of these rejections were for loads that were not scheduled to move until after the break, making the rejections more significant. Carriers rejecting loads with more frequency during a soft year carries more weight as it could signal carrier sentiment is shifting. This is likely due to capacity exiting the market with enough volume to have a tangible impact on rates.

Demand was high in November; the national Outbound Tender Volume Index (OTVI) hit a multi-month high over 10,700. However, this was not the highest value of the year. It climbed to 10,900 after Labor Day.

Business Intelligence Insight

It is now December and the final push of retail’s peak season is upon us. Finding capacity is harder for most than it has been all year and we expect this tightness to last through year-end. Compared to 2018, we have six fewer calendar days between Thanksgiving and Christmas. That’s almost a full week of less time to move the freight. Shippers playing the spot market can expect to pay a premium but should expect relief early in the New Year. Shippers who are heavily contracted can learn a lot about their carrier network when market conditions tighten.

Tender rejection data tells us everything we need to know; carriers are absolutely taking advantage of this opportunity to make up for a full year of lower revenues in the spot market. If a carrier is willing to abandon their commitments when they see an opportunity to cash in on higher paying spot loads, how can they be trusted to honor their commitments if the tight market conditions were to persist beyond peak season? Savvy shippers, who place a value on predictable transportation costs, should take these patterns of carrier behavior into account as they look towards locking in their contract rates for 2020. The lowest cost option may be tempting but at some point, the market will tighten and working to secure capacity at rates that make sense with carriers who honor their commitments is the best way to ensure your routing guide will not fall apart when the tide does turn.


The construction and housing sectors are some of the few bright spots in the overall economy. Single-family housing starts and building permits have been trending higher over the past few months. Single-family housing starts took off this summer after falling flat through most of 2018 and into early 2019. Limited inventories and competitive interest rates are keeping base prices high enough for builders to cover costs while keeping it affordable for buyers. Lumber prices have also moderated off the multi-year highs achieved in early 2018 making it easier for builders to purchase materials. The downward trend has reversed but at a much more sustainable pace than the torrid ascent when prices jumped 78% from June 2017 to May 2018.

Targeted Segments

New tariffs were recently announced on imported steel and aluminum from Brazil and Argentina, citing currency manipulation as the reason. Without digging too deeply into the cause, we note the announcement starts another potential trade situation with Latin America like the one seen with China over the past year and a half. Though there have not been any new tariffs implemented yet there is a risk of retaliation from affected countries which could be detrimental to anyone who exports to those countries. U.S. exports to Brazil accounted for 2.4% of overall U.S. exports in 2018 (or the 9th largest) and were dominated by mineral fuels, aircraft and machinery. The trade with Argentina is about a third of the size and has a similar import footprint to Brazil in terms of commodities. This dispute is unlikely to have the same macro impact as the trade war with China but could affect shippers in specific verticals as the situation evolves.

A Message From Matt

Since the beginning, Arrive Logistics has always focused on raising the standard of what it means to be a modern freight brokerage. Our first priority is always to help you achieve your business goals. That is why I am thrilled to provide our customer base with exclusive market data on a monthly basis.

We are interested in hearing how valuable you find this tool, so please feel free to submit any feedback using the button below. 

Thank you,

Matt Pyatt, Co-Founder & CEO

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