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Trucking rates surge amid restocking efforts in COVID-19 pandemic

Analysts expect rates to fall as freight volumes decline and the U.S. economy enters a recession.
Credit: Talk Business & Politics

ARKANSAS, USA — Spot trucking rates continued to rise as drivers delivered goods to allow retailers to restock after consumers depleted inventories in the wake of the coronavirus disease, or COVID-19 pandemic. 

But analysts expect rates to fall as freight volumes decline and the U.S. economy enters a recession.

Dry van spot rates rose 2.4% in the week that ended March 29, from the previous week, as truck drivers hauled freight to replenish retail inventory, according to DAT Solutions. 

Rates, however, are likely to fall this week as a result of declining load-to-truck ratios. But in the Southeast, ratios continue to rise on northbound lanes from the region.

Recently, truckload and airfreight sectors have been strong in response to the supply chain disruptions from the pandemic, but freight demand is expected to start falling in April, according to a transportation industry update from senior research analyst Benjamin Hartford and research analyst Andrew Reed, both of Baird. 

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The decline is expected to become evident starting with a decrease in the Purchasing Managers’ Index. 

The index shows whether the manufacturing sector is growing or contracting. A reading above 50% indicates it’s expanding, while a reading below 50% shows it’s contracting. 

Hartford and Reed expect a reading below 50% for March, a month that is historically good for transportation.

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