2020 has been a volatile year for freight. March and April saw historic drop-offs in freight volume and demand. Now, we’re seeing the opposite as the freight industry rebounds in a major way. Data from Uber Freight is showing ‘historic demand’ as businesses reopen and demand for goods kicks up at the end of the third quarter. It’s a trend that’s likely to continue into a traditionally busy time of the year. The question is, can we truly anticipate the fourth quarter in a year that’s proven unpredictable so far?

A Big-Time Bounce Back

According to Uber Freight’s COVID-19 analysis, “volume surged in essential goods while demand for nonessential freight drove down, disrupting supply chains and creating a rare imbalance in the marketplace.” Correlating to this, spot opportunities surged 250% in March before finally settling back to pre-COVID-19 levels in May, June, and July.

But now, those figures are on the rise again. As the U.S. battles the third wave (or third ebb of the first wave), freight demands are surging again. Essential goods, ecommerce, and the inevitability of the holiday retail season are pushing spot prices and demand way up. And while trend charts show a brief recovery for freight, the reality could be promising long-term demand for freight growth.

Better than Expected or Actually Good?

There’s no discounting the snap-back of a freight industry brought to a near standstill by COVID-19 earlier in the year. The question is, is freight actually surging or just outperforming nihilist predictions? According to the data, it may be a case of both.

The International Road Transport Union forecasted an 18% annual decline in road freight transport in early June. As numbers come in better than expected, there’s talk of finishing the year positive. This is further fueled by Uber Freight’s own data, which shows rates climbing again, this time up 5% from August to September. The reason has much to do with and increasing shift to spot freight. Moreover, consumer spending actually increased during the pandemic, aimed at online ordering — driving even more demand for freight. Against projected declines, these numbers continue to fan the hopes of a rapid recovery.

Momentum to Surge into 2021

There’s no getting around it: demand right now is historic. With more than one in four contracted loads rejected by carriers, spot prices are up a staggering 33% this year. Will this continue into 2021? Short of a crystal ball, it’s hard to tell. Here’s what analysts are predicting:

  • Freight volumes will grow in 2021 as goods production ramps back up.
  • Freight demand will remain inconsistent and difficult to predict short of a vaccine.
  • Spot prices will continue to climb to new highs as the freight industry adjusts.
  • The market will solidify its shift from a “shippers market” to a “carrier’s market.”
  • Regulatory issues will persist — especially on a global scale.

The surge headed into 2021 is being driven by ecommerce, fueled by the cyclical prospect of holiday shopping. However, this wave could continue largely based on shifting consumer habits. As ecommerce becomes the first choice of consumers, the supply chain will shift to adapt. For the freight industry, this could be the start of a historic new paradigm.

It’s impossible to predict the future of freight in this climate. What shippers can do is rely on the variables they control. Smarter contracts. Better logistics management. Proactive vs. reactive decision-making. It’s all possible with nVision Global’s Impact TMS.