Semi-truck with trailer on a highway
Some people will remember 2020 as the year they went to the store and couldn’t buy toilet paper, paper towels, and hand sanitizer. I will remember 2020 as the year that I begged for loads from customers like I never have before. (Please tell my wife I said it was the year we got married). As businesses started to slow down and shut down in some areas the spot market took some terrible dives. Spot market customers took advantage of additional capacity which drove rates down. This was certainly a good year to have contract rates in place. If it was not for some of our most loyal customers and toughest carriers, we may have been in even bigger trouble.
DAT Solutions reported a 19% truckload freight decline in March and April. Noel Perry anticipated a 30% GDP declined in the second quarter. It was rough. As hospitals became overwhelmed, fear struck America like never before and many businesses were not sure how to turn the lights back on. Fast forward a couple of months and we see a different picture.
Donald Broughton, who was previously a Chief Market Strategist and Senior Transportation Analyst for Avondale Partners, anticipated a sharp incline in freight rates and economic recovery following the pandemic. While Broughton’s projection was correct, his timing was just slightly off. Starting in mid-July, while the pandemic was still active, we saw the spot market and freight rates start to trend back up and maintain these higher levels. As capacity tightened, we saw the spot market slightly recover, however, it continues to remain volatile, going from one extreme to another, which we really have not seen before.
2020 has taught me a very important lesson. Building relationships with shippers and carriers is fundamentally the most important part of working in logistics. When things go wrong, you need tough, reliable carriers. When you need products on the shelf, you need tough, reliable carriers. I’m proud that here at the Allen Lund Company we were able to keep products moving even in the midst of a pandemic.
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