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Friday, February 12, 2021

Logistics Intelligence Brief


Manufacturing gains add to van volumes

DAT.com Dean Croke February 10, 2021

Dry van load post volumes on the DAT network increased 7% last week and are now up 121% year over year. The number of available trucks on the spot market was essentially unchanged, and the load-to-truck ratio remained at 4.55. The average spot van rate was higher on 58 of DAT’s top 100 van lanes by volume, although the number of loads moved on these lanes declined 2.8% compared to the previous week. Van load post volumes increased 5% week over week in our top 10 markets, although, following the national trend, capacity and rates were relatively flat. Manufacturing activity picks up The Institute for Supply Management’s manufacturing index slipped to 58.7% in January from 60.5% in December, its highest point in almost two and a half years, and close to a 16-year peak. ISM said absenteeism, short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers continue to limit manufacturing growth potential. For carriers, the good news is that of the 18 manufacturing industries tracked each month, five of the six largest ones—chemicals; metal; transportation equipment; food and beverages; and electronics), showed moderate to strong growth in January.

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Truckload freight market appears to be swinging toward contract carriers (Subscription Based)

The Journal Of Commerce William Cassidy February 11, 2021

Solid freight volumes, new home construction, and the first of the spring harvests are creating opportunities for trucking companies in February while cushioning a decline in spot market prices, according to data from DAT Freight & Analytics and other industry sources. At the same time, the truckload freight market appears to be swinging toward contract carriers as more shippers put business up for bid and sign annual contracts that include mid- to high-single-digit rate increases. Contract pricing gains may approach low double digits. Inventory shortfall pressures market In a normal cycle, the rise of contract rates above spot rates would signal an inflection point for truck pricing and a turn toward a more deflationary market. But this is not a normal cycle. COVID-19 pandemic disruption and an inventory shortfall may skew the cycle’s rhythm. Inventory replenishment that began across the US economy last fall is still under way, and the gap between inventory and sales in many sectors of retail and manufacturing is widening, Jason Miller, associate professor of logistics at Michigan State University, said Wednesday.

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Trailer Orders Ease; Supply Chain Issues Rise

Transport Topics Roger Gilroy February 11, 2021

U.S. trailer orders in January were 29,100, up 94% from the same month last year, ACT Research reported, citing manufacturers' initial data. A year ago, orders were 14,997, according to ACT, which, in a release called this January’s preliminary net total in line with expectations. “The industry continues to see solid interest from fleets for equipment acquisition. The slower order pace versus December [when orders were 43,806] was also anticipated,” said Frank Maly, ACT director of commercial vehicle transportation analysis and research.

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Investors feed small truck carrier tech momentum with SmartHop funding (Subscription Based)

The Journal Of Commerce Eric Johnson February 10, 2021

SmartHop founder Guillermo Garcia told JOC.com the company is built on a “model that gives economies of scale to small carriers, enabling them to compete with better capabilities than the leading carriers.” That includes giving them the ability to make better decisions when booking loads, an area that SmartHop customers in 2020 used to collectively grow their topline revenue by 9 percent, according to Garcia, as well as “back-office support to avoid administrative burdens so they can focus on driving.” He said the system also gives small carriers access to payments, lease, insurance, and fuel options through SmartHop’s embedded financial offerings.

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Change in Florida law counts as victory to curb lawsuit abuse

CCJ Aaron Huff February 10, 2021

Motor carriers, in cooperation with state and national trucking associations, are trying to curb lawsuit abuse. At this point, they’ll take even small victories to help keep insurance premiums at bay. One recent victory came in Florida and will allow trial judges to weigh compelling, reliable evidence from video event recorders to issue summary judgements. Video event recorders ushered in a new era of risk management when fleets started to use the technology more than 20 years ago. By now, the legal advantages of using objective video are well documented. Video evidence is often so compelling that legal teams for motor carriers and insurers are minimizing litigation expenses by successfully filing pre-trial motions for summary judgements.

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Economy Is Improving, but Challenges Remain, Economists Say

Transport Topics Dan Ronan February 11, 2021

Costello and other economists believe in 2021 the U.S. economy will be on more of an even keel than the roller-coaster ride that they saw in 2020, especially when the Gross Domestic Product plunged by 31.4% in the second quarter only to come back with 33% growth in the third quarter and then finish the year with 4% growth in the fourth quarter. Regarding trucking, the economy appears to have stabilized, according to DAT Freight and Analytics, which publishes a weekly report on freight loads and rates. “The fact that spot rates are so high and contract rates are up around the same level, carriers are doing pretty well compared to this time last year,” DAT Freight and Analytics analyst Dean Croke told TT. “Carriers are doing much better this year than they were at this time last year.”

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