California: Freight market analysis for Q3 2021
Southern California, presents a very tight availability of Hazmat and Tanker endorsement trucks in Q3 2021, according to DAT Freight analytics. Considering the total number of trucks available in Los Angeles, there are 9.6 loads requests per truck available. Thus, the availability is already limited to consider only the Hazmat and Tanker Endorsement Trucks which are close to 25% of the trucks available. This is the current situation and several reasons support this limited truck availably and price increase in the trucking industry.
1.California has become a key entry point for freight entering the U.S. in the post-COVID-19 market. There is a notable shift in shippers moving freight in through the eastern ports in late 2019, so, they have scrambled to recover lost time and manage inventories in what has become the new normal. According to the Freightos Baltic Index, Maritime spot rates have grown 84% from China to North America’s West Coast over the previous year as maritime carriers have cut capacity in anticipation of a decline in demand. Truckload volumes have grown 19% out of the Los Angeles market year-over-year (y/y), while domestic intermodal volumes have also increased 10% over the previous year.
2.The high increase in the Spot Market Loads and Van Rates (Spot) from Jun 2021 vs June 2020, when the rise of the Spot Market Loads was 101.5% and for Van Rate (Spot) was 47.1% showing a saturated market with new loads that were out of the radar and change the behavior of the market, impacting the pricing.
3.The rise of Fuel Prices in the US, especially in California. Comparing Aug 2021 vs Aug 2020, the fuel price has increased by $0.943 per gallon, reaching a price of $4.271 per gallon. This price is highly superior to the average fuel price in the U.S. which is $3.367 per gallon. This means that there was a general fuel price increase in The U.S. but specifically, California is one of the States with the highest fuel price increase, making more expensive the transportation services from this State
4.The truck availability is affected by the double brokering. Double brokering is the unauthorized re-brokering of a load to another trucking company and this situation has taken place in California reducing hundreds of possible carrier companies that can work for LFS. Here at LFS, we request specific information to verify the carrier company and provide qualified carriers for our customers. However, this impacts our truck availability and may affect the pricing as well.
More detailed information can be found in Freightwaves as a source of global freight news.
This California Freight Market Analysis: Q3, 2021 is built considering two sources: DAT Freight & Analytics and Freightwaves to keep you updated about the latest news and market trends. If you have any questions, please don’t hesitate to contact us.
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