Outbound tender volumes are revving up, especially from two major hubs in the U.S. This unexpected surge might just be a preview of what’s to come this holiday season. It is setting the stage for a bustling end to the year after a pretty smooth ride for shippers in terms of transportation capacity.
First up, we’ve got the Ontario, California market. This is a bustling hub known as the Inland Empire, housing one of the largest warehousing districts in the U.S. With Fortune 500 retailers making their mark here, the demand soared by a whopping 26% to kick off November. Talk about a turbocharged start!
Now, zooming over to the Dallas market. This market has been steadily climbing the ranks as a top 5 market for freight demand. Last week, outbound tender volumes leaped by a cool 12%. That’s the kind of momentum we like to see!
Both these markets are like freight powerhouses, churning out loads that travel a fair distance before reaching you, the savvy consumer.
Now, it’s not uncommon to see a spike in demand as we gear up for the holidays. However, this one’s a bit different. It’s like the holiday rush came early, catching everyone by surprise!
Taking a peek at the historical Outbound Tender Volume Index (OTVI), we’ve seen demand growth in early November over the past five years, typically around 2-4%. But guess what? This time, we’re looking at a 6.4% increase from a national perspective. Now, that’s what we call a demand surge!
Traditionally, such a surge would have caused a bit of chaos in capacity. However, there’s a kicker – carriers stepped up to the plate, accepting almost all these loads. And here’s the real showstopper – lead times between tender and pickup requests hit near annual lows for both markets. That means carriers are making quick moves, covering those shorter lead times like pros.
Now, let’s talk imports – they’ve been holding their own, especially in the third quarter. Some thought we were in for an early maritime peak season, usually happening in August. But here’s the twist – the demand stuck around even into early October, especially for the Port of Long Beach.
During the pandemic, imports were like hot potatoes, quickly moving from ships to rails or trucks, zipping their way to consumers. But now, with inventories in check, shippers are playing it smart. They’re holding onto goods in upstream warehouses, only hitting the road when demand sparks up. It’s like a dance of just-in-time inventory management, keeping things efficient.
As we roll into the holiday season, this strategy might cost a bit more. With less available capacity and retailers feeling the urgency, we might see more instances of demand spikes and speedy, guaranteed shipments.
Shippers seem ready to foot the bill for these increases, considering they’re still modest compared to the wild ride of 2020-21. But don’t be surprised if there’s a bit of sticker shock – after all, it’s been an exceptionally smooth ride for sourcing capacity this year.