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Brokers: capacity migrating south for the winter

Back-to-back major snowstorms in the Midwest have tightened freight markets in the region as trucking capacity flows South in search of more favorable conditions. Retail freight in Southern California and cross-border lanes is still pulling capacity away from northern markets, driving up turndowns and compressing broker margins. This week, another winter storm threatens to drop ice and snow on a broad swath of the country from Oklahoma City through Missouri, Kentucky, and Virginia. We’ll be watching to see if bad road conditions continue pushing capacity into the Southeast, which is already becoming an oversupplied market. Aside from capacity distortions in the Pacific Northwest and Midwest, much of the country has stabilized, with regional volumes for the most part matching expected seasonal trends.“For us, in the final week of November, we had record high volumes. Most of the country is in a normal pattern, historically speaking.”Indeed, volume outbound from Los Angeles (OTVI.LAX) dropped 5.7% since November 30 while capacity (TRUK.LAX) has remained stable. Carriers are rejecting 28% of loads outbound from Omaha (OTRI.OMA) and Kansas City (OTRI.MCI); turndowns are up to 39% in Joplin (OTRI.JLN). Capacity in the Southeast, however, has loosened and it’s become much easier for brokers to find trucks. ) “We have seen capacity loosen up drastically in the last seven days,” Carter Garrett, VP of Sales at Trident Transport, wrote to FreightWaves by email. “There’s still a lot of retail stuff pulling capacity out of the Pacific Northwest down to the south,” Roberts said. “Laredo specifically has been wide open; capacity is very loose over there.
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