Industry News, Supply Chain, Trucking

Shippers Predict Higher Demand With Capacity Issues Following

Point To Point

The most significant question asked in our survey is whether businesses foresee an increase or decrease in shipping volumes for the upcoming year. This year’s results revealed the largest jump in shipper confidence since we began the survey six years ago. Of those surveyed, 73.44% expect to ship more in 2021 – a 7.21 percentage point increase from the year before.

Taking a step back, it’s clear that many shippers envision an economy that is increasingly open for
business this year. Though it will take several months before COVID-19 vaccines are fully distributed
throughout the U.S., consumer spending and travel is expected to grow as more individuals are able to
move about with confidence.

At the same time, many economists are predicting strong growth as the year progresses. Morgan Stanley
projects a global GDP growth of 6.4% as economies in the U.S. and Europe begin to reopen. Given the
ability of the U.S. economy to weather the pandemic strain last year, it could come as no surprise to see
increased demand for products and services across many industries that had been hard hit in 2020.



Higher Demand Poses Possible Dilemma

When we asked shippers if finding adequate freight capacity overall in 2020 was a challenge, 24.88% said “yes,” nearly double the previous year’s response of 12.34%. Much of the issue stemmed from the surge in consumer spending in the second half of 2020. However, there were sleeping giants beneath the surface during the first half that have continued to affect freight capacity on the ground.


As manufacturing temporarily shut down across North America during the first several months of the
pandemic, many drivers were suddenly furloughed and even laid off. Already met with an ongoing driver
shortage, many carriers have been challenged to find drivers to fill and refill the seats needed to meet
the growing demand for LTL and full-load freight needs once businesses and manufacturers began
to reopen.

At the same time, domestic freight capacity has been strained by cargo congestion at ports throughout North America. In previous years, shippers were not as concerned about having imported cargo idling at nearby warehouses. Unfortunately, closures and reduced operations at origin manufacturing facilities and ports abroad early in the pandemic led to dramatic delays that lasted weeks and even months. Today, backlogs of imported goods from Asia and abroad are still seeing delays due to decreased capacity created by ocean carriers in 2020.

With shipments expected to continue to grow throughout 2020, freight capacity could become a primary concern for many shippers. Consequentially, as supply and demand collide, rates may also ebb and flow over the course of the year – particularly during retail-heavy seasons.

This post is the second article in a series that reviews the results from the sixth annual State of the North American Supply Chain Survey. You can download the comprehensive white paper here.

Click Here To Download  The Results White Paper

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