I can see Ohio from my deck!

Actually what I can see is the rising Tennessee river but that is another story.

Let me share a little insider secret. When the freight markets are depressed, the mostly smart money runs to the big freight markets. Everybody runs to Atlanta GA, Harrisburg PA, Chicago IL, Dallas-Fort Worth, Houston and Los Angeles -Ontario CA. These are the safe zones where you can always find freight in down markets because they are the largest freight markets. The REALLY smart money hangs out in other places. Instead of Atlanta, look for loads to adjacent markets like Birmingham, Chattanooga, Charlotte or Huntsville. There are too many trucks in the major freight markets which depresses rates in those very same markets that are seen as safe havens. We work to identify secondary markets (like Columbus Ohio) where the load to truck ratio is positive. Or take loads into areas that many want avoid like Michigan, Minnesota and Wisconsin due to weather. It is all about having a plan. Work smarter, not harder.

This year, at this time, the West Coast is a uniquely bad place to be. Between Chinese New Year and now the Coronavirus outbreak, the West Coast ports are experiencing a huge drop in volume. According to Freightwaves, there are normally 75 trains a day out of the port of Los Angeles but that number is down to 32. Trucks in and out of the port of Los Angeles have dropped from 16,000 trips a day to 8,000 trips a day. That is at least 40,000 fewer containers coming into Los Angeles each week and those trucks not running drayage in the ports are competing for regional freight because nobody wants to park their trucks. Shippers in general are purposefully slow on the uptake in situations like this so rates into Los Angeles do not yet, and may never, compensate for the low rates out.

Spring is coming early this year. Capacity is getting tighter and until about a week ago we were very bullish on the outlook for carriers for the rest of the year. I still feel this way if we can avoid a freight meltdown due to the virus outbreak. The next two weeks will probably tell the tale.

I am always available if you have questions. Just shoot me a message at craig@logisticsatb.com.

 

 

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