There are most certainly seasonal trends in the freight business. The first few months of the year usually are slow ones for truckers, as retail sales drop off after Christmas and the start of the new year. Freight rates usually are lower in the first quarter of the year, January through March, as a result. In this blog, we take a look at what Q1 historically has been like for truckers like you and what you can expect this year in this first quarter of 2021. We also share insights into the resources you can use to maximize your revenue in Q1 and beyond.
The first quarter of the year is usually a relatively slow one in trucking. After the rush of going back to school in the fall and the December holidays, many freight markets are quiet. Truckers and freight brokers/3PLs often are coming back to work after some time off in December and volumes are typically at their lowest. As a result, truckload rates usually favor shippers for most of Q1. At the end of February and into March, freight volumes usually pick up as produce starts coming out of Southern Florida and produce volumes from Mexico increase across the southern border of Texas.
In the last week, there has been a dip in demand and rates at the national level for both dry van and reefer capacity. FreightWaves recently reported that dry van rejection rates have fallen to 21 percent and reefer rejections have fallen to 41 percent since the beginning of the year. A dip in rejections is certainly expected at this time of year.
With that being said, rates and demand remain relatively high in most markets for this time of year. According to FreightWaves, tender volumes currently are up by 23 percent over last year. The COVID-19 pandemic is driving this surge in demand, as many consumers work from home and are homebound during the pandemic. As was the case for most of 2020, online retail is through the roof and consumer spending is still extremely high. Because they’re at home and unable to do things like travel or go to concerts, consumers are spending their money on physical goods, such as home renovation products and outdoor recreation/sporting goods. Some are predicting that the first quarter of 2021 could be the most profitable first quarter for the industry ever because of the sustained demand for physical goods and, therefore, truck capacity.
There are several unknowns that could affect markets and rates for truckers like you in the remainder of Q1. As is the case in most parts of the world, COVID-19 infections are on the upswing at some West Coast ports. Outbreaks of COVID-19 at ports (and at factories) could grind regional supply chains to a halt, which could impact freight volume and rates. Congress also may pass a new stimulus bill this quarter, which would presumably boost consumer spending further. The large-scale manufacturing and distribution of various COVID-19 vaccines may have a major impact on demand for trucks and on truckload rates, as well.
In unpredictable times like the present, knowing which markets will be hot and which will be cold helps you maximize your revenue. You can stay on top of the latest demand and rate fluctuations by reading Trucker Tools’ Market Index Reports, which are published every Monday, Wednesday and Friday. Trucker Tools’ free Market Index Reports tell you where rates will be high and low over the next five to seven day period. Knowing which markets will be hot or cold in the future gives you time to get your truck(s) into hot markets to capitalize on high demand/rates and out of cold markets before demand/rates dip. Our Market Index Reports are accurate because they are based on real-world data from our driver app and broker software platforms, as well as data from FreightWaves SONAR.
If you’re looking to reduce your expenses and increase your revenue, read Trucker Tools’ Driver App: Keeping You Moving and Making Money During the Pandemic. To download Trucker Tools’ free app for truckers, visit https://www.truckertools.com/carriers/.