2021 Q1 Combined Tender Reject Details
This past quarter, the market experienced a period of significant winter storms hitting Texas to New England and the Midwest to the Southeast. These storms produced heavy snow, winds and sub-zero temperatures over a period of weeks. This lead to power outages and closed roads that impacted many transportation providers.
In January and February, several cities with significant production areas were affected by this severe weather:
Chicago, IL
Due to shutdowns caused by the recent inclement weather, we saw many normal shipments become expedited. Rejections of tenders are increasing in this area as time-sensitive freight is still the norm.
We have also seen intermodal rejections increase as shippers try to utilize the rail for cost savings. Midwest carriers are staying east as weather over the mountains has delayed drivers. We feel rates should stay higher until time-sensitive freight returns to normal.
Harrisburg, PA
A significant production area that was shut down for over a week. Lead times are still very short. We anticipate rates to stay high until overall lead times in the area are lengthened.
Houston, TX
Transportation and production stalled for almost a week due to winter storms. We anticipate rejection rates to decrease over the next week or two as the area recovers.
Los Angeles, CA
Many western carriers remained west of the mountains over the last two weeks. They did not want their drivers stranded for days/weeks.
Without those carriers bringing backhauls in return, freight moving from east to west became higher priced head hauls.
Atlanta, GA
Tender rejections have started to decrease slightly as this area was not impacted as much as TX, LA and AL.
We anticipate rates in this area to come down slightly over the next week, but could see another increase as produce season approaches.
Winter Weather Causes Problems/Freight Rates Rise
From Scott Mall in the Freight Market Blog
Heavy snow and icy conditions across large areas of the United States over the past two weeks have caused problems in many freight markets. And while the nasty winter weather has slowed and even stopped some trucks, freight rates have continued to rise.
Back-to-back winter storms are stalling supply chains. The second winter storm of this week slammed parts of the South on February 17. Several more inches of snowfall, along with some sleet and freezing rain, spanned from Texas to the Tennessee Valley.
See the Image Below
This storm is impacting trucks, trains and ships from the Appalachians to New England. In addition to road closures, some airports and intermodal terminals remain closed.
Roads are still covered in snow and/or ice in many states across the southern Plains, as well as the Mississippi, Tennessee and Ohio valleys. Most issues and closures are on U.S. and state highways.
Map: February 25, 2021
Executive Summary
The market experienced a period of significant winter storms hitting back-to-back from Texas to New England and the Midwest to the Southeast. These storms produced heavy snow, winds and sub-zero temperatures over a period of weeks, leading to power outages and closed roads that impacted production facilities and all transportation providers. Our customers have experienced significant delays in their supply chain from their suppliers.
As the market corrected and temperatures started to rise, retailers needed product to restock shelves, manufacturers were shipping to fill store needs and the order timeframe shortened. We anticipate an equipment imbalance correction will take place over the next few weeks and may roll into the Quarter-End volume spike. If another significant winter storm occurs, we anticipate that a market imbalance could last through the end of the Quarter before Produce Season starts.
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