We saw rejection rates continue their rapid descent in April, pulling rates down with them. In addition, Thermo King rolls out a new trailer refrigeration unit, Transport Topics announces their top 100 brokerage firms, and more.
Check out March's trending transportation update on the shipping industry if you missed it.
After two years of unseasonable dips in freight demand, we see a downward trend, reflecting shippers' congested inventories and consumer concerns about inflation rising. As a result, the Outbound Tender Volume Index (OTVI) is down compared to last year's levels. For example, the OTVI declined by 0.93 percent in the previous week, making it 16.6 percent lower year-over-year.
Beyond seeing increased spending on household necessities, such as gasoline, utilities, and food, we see a change in consumer demand moving from goods to services, which lowers the freight volume overall.
But why was there a recent dip in freight capacity?
There are a few reasons behind this recent shift. The first reason for the change is that consumer demand was geared more toward services before the pandemic. However, when the stay-at-home- order was put into place to prevent COVID from spreading - the service industry, such as restaurants, movie theatres, and airlines, became inaccessible. As a result, many of them shut down for a period of time. With the Omicron variant growing distant, lockdowns being lifted or lessened across the country, consumers are resuming their spending on services.
Another reason we see a shift from goods to services is because of the government's stimulus checks. When people in the U.S. received their stimulus checks, e-commerce increased. As a result, consumers were stuck at home and used online resources to purchase their goods. During this time, a sudden influx of demand outstripped capacity, allowing carriers to charge steep rates in the market. After almost two years of consumers spending their money shopping online, they have effectively purchased everything they needed. Thus, consumers started to indulge in activities such as traveling and dining, things they could not do as much during the pandemic.
Learn more about the recent dip in freight demand.
On April 20th, Thermo King announced that it recently introduced the Precedent S-750i trailer refrigeration unit, its latest innovation in transport refrigeration for long haul and local food distribution. This refrigeration unit has a diesel-electric architecture optimized for shore power integration.
Thermo King intended to help customers transition fleets to reduce their environmental impact by making it electric with integrated shore power. To help ensure this, Thermo King used the S-series engine, which gives Ultra-Low Emission Transport without using a diesel particulate filter.
Each unit is equipped with tracking telematics to deliver the data customers need for 12 months of ownership at no charge.
Learn more about the Thermo Kings' new refrigeration rollout.
On April 21st, Amazon announced they were launching the Amazon Industrial Innovation Fund. With this fund, Amazon plans to invest $1 billion in companies developing technologies in logistics, supply chain management, and safety, aiding their core business.
The Amazon Industrial Innovation fund will back companies of all stages working on technology to increase e-commerce delivery speeds and improve the experience of workers in logistics and warehousing.
Alex Ceballos Encarnacion, vice president of worldwide corporate development, said, "We're excited to help advance these technologies as online shopping becomes even more important to people looking for more convenience and time savings."
Learn more about the Amazon Industrial Innovation Fund and what it can provide for your business!
The national average price for diesel resumed its upward course. According to the Energy Information Administration (EIA) data, diesel increased by 2.8 cents last week, making the average diesel price $5.101 a gallon.
Hopefully, with gasoline prices decreasing, we will start to see a decrease in diesel prices soon as well.
Learn more about diesel prices.
Earlier this month, Transport Topics announced their top 100 Brokerage Firms for 2022. PLS Logistics Services was ranked 25th, eight spots up from last year. Transport Topic's annual list ranks freight brokerage firms based on gross revenue for the most recent 12-month period. In addition, the list includes a breakdown of the largest freight brokerage firms, freight forwarders, warehouse operators, and dedicated contract carriage service providers in North America.
View the complete list of the Top Freight Brokerage Firms.