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Tight trucking capacity likely for June as overall market shows some improvement

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Tight trucking capacity likely for June as overall market shows some improvement
When it comes to the ability to find dry van and reefer capacity during the 30 days in June, the two main constraints are produce harvesting in the south and household goods nationwide, according to an industry insider.

LITTLE ROCK, Ark. — Although some data suggests that one major cause of supply chain issues in the United States — a shortage of available trucking — may be easing overall, June stands to see a tight market for truck capacity, just as in previous years, according to an industry expert.

“From the first wave of summer’s produce season in Georgia to the transport of farming equipment and construction machinery around the nation, not a single trailer is left unused, and many are overbooked,” wrote Eric Metso, a sales manager with ATS Transportation, in a recent blog posting on the coming challenges in the trucking industry.

“June creates the perfect accumulation of demand that, without exception, tests the trucking industry’s ability to keep up. Frost laws have ended, a lot of produce is in season and it’s finally time to fix that pothole at the end of your street.”

Metso wrote that at ATS, the company typically sees a 15% uptick in volume compared to May.

However, a recent Harvard Business Review report suggests that the overall tight market for trucking capacity is showing some signs of relief.

Spot market data indicates that the acute shortage of U.S. trucking capacity is just about over,” according to Harvard. “Prices began to decline in January, after the holiday season and they have continued to do so.  Shortages of drivers also appear to be diminishing. Recent reports about the time it is taking to unload ocean shipments provide similar signals.”

June dry van and reefer capacities

When it comes to the ability to find dry van and reefer capacity during the 30 days in June, the two main constraints are produce harvesting in the south and household goods nationwide, according to Metso.

He wrote that “each of these events plays a role in tightening dry van and reefer capacities across our nation in June.”

June marks the initial wave of produce harvest, and distribution, throughout the southern U.S. in many coastal states as farmers along the eastern section of coastline need to move their products from the fields and onto the shelves of grocery stores and produce markets across the nation.

“This influx of demand makes the month of June in states spanning the south to south-eastern portions of our nation, an absolute hotbed for reefer and dry van capacities,” Metso wrote. “The transportation of high-liability, perishable freight fetches a pretty penny for the truckers fortunate enough to be located in these regions.”

Finding a trucking solution out of these areas will cost more in June as carriers are highly motivated to stick around these locations, according to Metso.

June equals ‘household goods season’

“On the flip side, if you’re a shipper looking to move reefer or dry van freight into these areas, finding the capacity to do so will likely come easily,” according to Metso. “Drivers love to maximize their time and if your freight will help them get to the cornucopia of harvest-based demand in these regions, name your price, you’ll find plenty of takers.”

For an eight-week window of time beginning in June, the movement of household goods across the United States ramps up substantially. This time of year marks the end of the school year and the beginning of summer, making it the perfect time for families who are looking for a change of scenery, to find one.

And thus begins household goods season.

“As individuals, couples and families uproot their lives and move to a nearby town, state or faraway place, the moving companies — tasked with helping them do so — need to find dry van capacity,” Metso wrote. “These companies begin their work by reaching out to their carrier partners to find the capacity they need to move their client’s furniture, appliances and other household items.”

June, more than any other time of year, is the month where this process is at its peak, people are moving and they’re taking a lot with them, according to Metso.

“In turn, this uptick in dry van demand tightens transportation capacity around the nation as people relocate during June,” he wrote. “This makes it harder to find a truck at the price points of other months.”

How are open-deck capacities impacted in June?

The hustle and bustle of America’s highways, prompted by good weather and the promise of a long fruitful summer is thanks, in no small part, to the frequent transportation of open-deck freight. according to Metso.

“In the northern U.S., the snow has gone away, the trees are dense with their newfound leaves and the children are gearing up for what promises to be a long, hot summer,” he wrote.

“This also means that the frost laws —dictating gross weight limits on the fragile interstate highways in this region — no longer apply. And what perfect timing. The fields are ready for plowing and that 4th-street overpass can finally be reconstructed. Luckily, in June, the machinery needed to churn up the earth and hoist construction materials can finally be moved.”

As such, the large equipment that couldn’t be transported in previous months, line the interstates of northern states in June, according to Metso.

“Drivers should expect larger freight like farm equipment, construction equipment and other oversized machinery to soak up a large portion of open-deck capacities as the seasons change in this region,” he wrote. “The southern U.S. also transitions into an open-deck hotbed in June. With a lot of similarities to the northern states, the southern portion of our nation also transports a large quantity of open-deck freight as we steadily approach the solstice.”

How do national events impact capacity in June?

June, unlike any other month of the calendar year, is both capped by national holidays and features the end of a quarter. Each of these events impacts capacity in separate, but equally disruptive, ways, Metso wrote.

How do national holidays impact Capacity?

From Memorial Day on the final Monday of May — impacting the ability to find capacity over that weekend — to the fourth of July the following month, national holidays should be noted and planned for in this industry.

“Just like you and I, truck drivers also like to spend holiday breaks at home with their family and friends,” Metso wrote. “As such, the demand for their services especially following Memorial Day — will spill into June. This increased demand for capacity — in anticipation of the congestion of the 4th of July and avoidance of Memorial Day — will increase prices as demand shifts into the weeks of June. As such, you’ll want to make sure that you plan for these national holidays, and wherever possible, schedule your shipments around these periods.”

How does the end of quarter two impact capacity?

As the nation edges toward the end of the second quarter, halfway through the calendar year, businesses across the U.S. will be distributing their inventories and fulfilling their supply chain commitments. This is done in anticipation of quarterly reporting and analysis as these businesses strategize for the upcoming quarter.

“These companies will increase their demand for capacity as they move commodities in anticipation of quarter end, tightening the market even further,” according to Metso.

How should you prepare for June in the trucking industry?

“Even though June is an incredibly busy time in the trucking industry, your budget is still important and we’re here to help you through it,” Metso wrote.

“The most important thing that you can do to maximize your budget this June is to provide your transportation partner an adequate amount of lead time. Although it varies by equipment type, region and commodity, a good time frame for notice falls between 48 and 72 hours before the time your shipment needs to load. Given this amount of lead time, a great transportation partner will be able to secure your truck at a reasonable price and get it to your facility when and where you need it.”

 

 

 

The Trucker News Staff

The Trucker News Staff produces engaging content for not only TheTrucker.com, but also The Trucker Newspaper, which has been serving the trucking industry for more than 30 years. With a focus on drivers, the Trucker News Staff aims to provide relevant, objective content pertaining to the trucking segment of the transportation industry. The Trucker News Staff is based in Little Rock, Arkansas.

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The Trucker News Staff produces engaging content for not only TheTrucker.com, but also The Trucker Newspaper, which has been serving the trucking industry for more than 30 years. With a focus on drivers, the Trucker News Staff aims to provide relevant, objective content pertaining to the trucking segment of the transportation industry. The Trucker News Staff is based in Little Rock, Arkansas.
For over 30 years, the objective of The Trucker editorial team has been to produce content focused on truck drivers that is relevant, objective and engaging. After reading this article, feel free to leave a comment about this article or the topics covered in this article for the author or the other readers to enjoy. Let them know what you think! We always enjoy hearing from our readers.

Tight trucking capacity likely for June as overall market shows some improvement

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