For 2021, expect the Part Truckload (PTL) freight market to remain volatile due to the impact of COVID-19. Many PTL industry trends, such as capacity, rising rates, and changing consumer utilization patterns, will continue through 2021.
The fourth quarter of 2020 gives us a glimpse into the freight market forecast for 2021. E-commerce sales boomed in categories such as groceries and retail. As e-commerce surged, PTL, truckload, and small parcel capacity tightened, which lead to record rates in some lanes. PTL shippers should start 2021 prepared for higher freight rates due to PTL capacity constraints.
Let’s look at top PTL industry trends for 2021.
Fuel rates in the country have sharply increased after the latest round of fuel price hike by oil marketing companies (OMCs). Experts have said the continuous increase in fuel prices will have a widespread impact on freight rates. Even when international crude oil prices decreased in 2020 due to lower demand, Indians kept paying higher rates due to the various taxes levied. At the moment, Indians pay one of the highest taxes on fuel in the world.
Clients(Shippers) should expect the price increases to continue into Q1 2021. For transporting high-density material and bulky freight, such as big and bulky items, you should expect PTL freight rates to increase. What’s behind the anticipated PTL shipping rate increases? Here’s a look at three key factors.
Season of Crop cutting is also in sight, Instead of Driving, Drivers are in the fields to cultivate crops. Due to shortage of Material and inconsistency of loads drivers are forced to choose alternative jobs. The average age of PTL drivers is in the 60’s and older. Many drivers took early retirement due to the COVID-19 risk factor.
Like many industry sectors, PTL carriers underestimated the e-commerce boom resulting from the COVID protocols. PTL Carriers are either finding an alternative to survive or are increasing prices to sustain.
Carriers faced a whipsaw effect through the year as they struggled due to low volumes during the height of COVID-19 shutdowns. However, volumes are extremely high in Q4 of 2020-2021, and carriers struggled to keep up. As strict shutdowns return, volumes could drop if many shippers are forced to close. Although we expect volume could spike again in response to higher consumer demand after lockdown.
Carriers will be cautious about raising rates and instead should reject undesirable freight. Many carriers are walking a fine line of balancing rates and their operating ratio, which is why shippers should prepare by understanding the reasoning behind PTL rate increases in 2021.
Don’t waste carriers’ time or money by making them wait or reschedule appointments. Recognize drivers as a vital part of the supply chain and make their lives easier. Also, use a TMS to receive freight bills quickly.
Set customer expectations due to capacity constraints. Be realistic, and factor missed pickups and late deliveries into your planning. For time-sensitive shipments, use priority service or expedited when necessary.
Consolidating PTL into FTL hauls carriers may boost capacity, but shippers need to be prepared for significant delays.
Expect transit delays and missed pickups and create forecasts accordingly.