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Freight capacity shortages and service challenges

Freight capacity shortages and service challenges
February 10, 2021

Freight capacity shortages and service challenges remain at some level and the sustained growth in shipments across the logistics industry contributed to these numbers. Many distribution centers were taking longer to accept shipments which led to carrier back-up and detention and storage charges which are unheard of in the LTL market have become more common. In truckload freight, volume is up, and service is down. Dry van contract volumes were down while spot market volumes were up. Driver shortage was a common reason with varying emergency restrictions coming in second.

Given ongoing capacity constraints, the truckload market prices continue to increase for at least the first half of 2021. C.H. Robinson repriced their contracts in the truckload business to reflect the rising cost of the environment and is passing along to its customers. JB Hunt is taking similar steps with its President of Intermodal stating, “Costs on all fronts, dray, rail and productivity, have all come at us at a fast pace in 2020, and this New Year presents our opportunity to price those costs into our business.”

Shippers are making these costs less severe for transportation providers. They focus on reducing dwell time and remain consistent in avoiding putting loads on the spot market.

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