As the nation continues to ride the roller coaster effects of the Coronavirus, the drayage market is changing rapidly in the fourth quarter of 2020. With the current environment, and holiday season e-commerce boom, consumer demand is driving a surge of imports into the United States.
VOLUME INCREASE
Volumes are elevated due to shippers re-scheduling blanked sailings from earlier this year (when shippers cancelled sailings over COVID-19 fears). These volumes are set to fill current consumer orders but also to help companies stock up for the holiday season. According to FreightWaves, the current inventory-to-sales ratios are at record lows. That means companies will be looking to quickly stock up on inventory as e-commerce shoppers add more products to their carts.
LIMITED AIR SHIPPING OPTIONS
As shippers are stocking up on inventory, they have fewer options as far as transporting those goods across the ocean. Due to decreased airline travel, there is less space for air freight, prompting shippers to turn to drayage shipping. In turn, that creates a boost of drayage volume coming into the US, resulting in a carrier deficit. The tight capacity with increased volumes produces the perfect situation for increased drayage rates across the board.
FUTURE EXPECTATIONS
NTG expects drayage volumes to keep this increased demand, even after the holiday season tapers off as shippers still look to re-stock inventory for the new year. There is already some indication of this – as NTG has seen a 26% daily average drayage volume increase from September to October (with 10 days still left in the month.) NTG also anticipates some ports to see strained operations as well. The port of LA has already seen import volume increase nearly 17% year-over-year. This new drayage environment could also lead to port storage shortages and even keep full ships in the harbor until they can be unloaded. That drastic scenario could lead to even further delays and greatly impact overall supply and demand.
Companies need to keep all of these factors in mind when importing products to meet consumer demand. In these unusual circumstances, it’s important for shippers to take advantage of a 3PL’s dedicated drayage carrier network. NTG’s experienced Drayage Department is ready to help you with your shipments by providing capacity solutions when you need them most. Just connect with our Drayage shipping experts to get started.
