North American Freight Market Insights

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Transportation Market Overview

TOP STORY: The impact of hurricane season and recent storms on transportation

Hurricane Map | C.H. Robinson

During national holidays and annual events, it’s simple to predict when drivers and carriers will take time off and shippers will ship less.

But what about large, unpredictable events, like hurricanes? NOAA has forecasted another active hurricane season. In fact, forecasters suggest 2021 will be a year of higher than normal hurricane activity. While this does not necessarily mean transportation disruption, supply chain professionals should plan for “what-if” scenarios.

Hurricane season in the United States is typically June through November every year. While hurricanes are not scheduled events like national holidays or DOT’s annual Roadcheck week, there is a predictability to their impact. This predictability means it’s possible—and smart—to use insights gained from past hurricanes to develop more resilient supply chain strategies in the face of disruption.

Harvey, Irma, Michael, Laura, and Delta
Using DAT data during five hurricanes in recent history offers many insights on load to truck ratios (LTR) and spot market cost per mile (CPM).

Hurricane season | C.H. Robinson

Insights gained from hurricane Harvey

In 2017, hurricanes Harvey and Irma landed back to back and disrupted life and logistics for the southeast United States. Harvey had two landfalls and stalled over the Houston, TX region, dropping unprecedented rain—as high as 60.5". This caused flooding, shutting down logistics hubs, roads, and supply chains for the fourth largest city in the United States.

Two weeks later, Irma landed in south Florida and moved north up the peninsula with gale-force winds and rain to Georgia, before weakening to a tropical storm.

Respectively, the two visuals below show outbound and inbound loads from the Houston area during hurricane Harvey. Both provide an aggregate view of a 150-mile radius and show load volumes and load volume changes as a rolling seven-day average. Here’s how to interpret the charts:

  • Day zero: Harvey’s landfall in Texas, the day of impact in Louisiana is not represented.
  • Gray bars: Change in loads per day in the Houston region.
  • Orange bars: Change in loads nationally.
  • Blue line: The DAT outbound aggregate change in CPM for the Houston area.
  • Orange line: The nationwide aggregate change in CPM.

There is an increase of about 7% in CPM just before landfall, then the CPM increase falls off as the Houston shipping community essentially shuts down from the storm and flooding. By day five, pricing starts to rise as the market works to entice carriers to move freight within the flood area. Pricing continues to rise over 35% from the start of the event to day 11, before finally settling down around day 15.

Note how the overall market rose about 10% during the worst part of the storm and settled to ~5% increase for the period shown. As the fourth largest city in the United States, Houston has an impactful freight economy, which can (and did) disrupt truck flows nationwide. Also, keep in mind that during the peak of the storm, both loads posted and trucks posted in the Houston area fell (similar to some national holidays), making LTR's appear a bit misleading when compared to non-disruptive periods.

hurricane-harvey-impact-business-days-outbound | C.H. Robinson

Source: C.H. Robinson seven-day average load volume and rate data outbound shipments from a 150-mile radius region from Houston, TX.

For inbound loads to the Houston area, businesses and carriers curtailed activity and increased CPM three days before Harvey hit Texas. This activity continued upward to day 11 before decreasing.

Note the persistent elevation in CPM for inbound loads compared to the rest of the country after Harvey. Demand into the Houston area was elevated for quite some time beyond what is shown here, first for relief and then for recovery. This imbalance continued to disrupt historical freight flows into the region and contributed to some nationwide disruption of capacity flow.

hurricane-harvey-impact-business-days-inbound | C.H. Robinson

Source: C.H. Robinson seven-day average load volume and rate data inbound shipments from a 150-mile radius region from Houston, TX.

When looking at inbound loads to the Houston area, we see that businesses and carriers curtail activity with increases in CPM occurring three days before Harvey made land fall in Texas and continuing upward to day 11 before starting its way down. Note the persistent elevation in change in CPM for IB vs. the rest of the country. There was elevated demand into the Houston area for quite some time (beyond the time shown here), first for relief and then for recovery that continued to disrupt historical freight flows into the region and contributing to some nationwide disruption of capacity flow.

Comparing Harvey’s disruption to other recent hurricanes
The below table demonstrates the varying impact on transportation and logistics that can occur from hurricanes in the United States.

hurricane-table-tw | C.H. Robinson

Considerations and best practices for hurricane season
While a more active hurricane season does not mean that the landfall and disruption experience will be like the examples offered, it does afford the opportunity to consider today's already tense market compared to previous years.

Below is a six-year view of DAT's LTR. Displayed by the red line, 2021 has the greatest ongoing tension. When tension is high and a large regional or national disruptive event occurs, the tension is exacerbated. For example, February’s winter weather in the South and Southwest disrupted both regional freight and capacity flows as well as national LTRs with a record 12:1 LTR nationwide average.

Another example, DOT's Roadcheck week, a three-day event, this year it was held a month earlier. Held in May 2021, LTRs peaked at nearly 8:1, exceeding even 2018's levels.

Ultimately, it’s reasonable to expect a significant hurricane event could greatly impact trucking across the country.

DAT-dry-van-LTR-ratio | C.H. Robinson

Key insights about hurricane disruption

hurricane-timeline | C.H. Robinson

  1. More intense storms have a lingering impact on volumes
    Storms like Michael and Harvey both experienced increased inbound and decreased outbound orders.

    Carriers tend to keep drivers away from areas with weather issues—for both the safety of the driver and the equipment. Even with volume decreasing, capacity into and out of the region dropped so much that pricing increased meaningfully.

  2. During the volume lull and surge, cost increases are almost a certainty
    While the intensity of the storm is a factor of this increase, costs tend to have a greater impact on larger economic markets.

  3. Cost/mile increases out of storm-impacted areas
    However, the largest impact on CPM is inbound orders to impacted regions.

  4. Major disruptive events amplify market tension

Develop a proactive hurricane strategy

Each hurricane event has a unique impact on supply chains. When planning and monitoring an impending landfall, consider the following:

  • Location of landfall
  • Duration of landfall
  • Localized or super regional
  • Other mitigating events such as current market tension
  • Nationwide impact: The broader supply chain and transportation experience could be disrupted
  • Consider advanced deployment of inventory and pull forward of orders
    • Focus on inbound materials and goods from the region
    • Deploy inventory to a safe location
    • Create a backup distribution center strategy if a location is shut down
  • Transportation:
    • Create a capacity strategy for lanes exiting backup distribution centers
    • Prepare your budget for sourcing locations that have different costs
    • Plan for the lingering effects beyond the immediate landfall
    • Expect increased tension and pricing in the broader market
  • Collaborate and communicate strategy with supply chain partners (suppliers, customers, warehouse and transportation providers, etc.)

Finally, remember to be flexible. As every hurricane is unique, and this season overlaps with an exceptionally unique and tight truckload market, be prepared for the unexpected—road closures, power outages, bad weather, capacity stresses across surface transportation modes, and pricing pressure to name a few.

North American Freight Market Insights | C.H. Robinson

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Full Truckload Shipping

TOP STORY: Discerning when supply and demand get closer to balance; forecasts suggest spot market pricing will peak end of 2021

Demand (truckload volume forecasts)

The overall freight environment is strong against a freight capacity market that is largely stagnant or smaller in 2021 than pre-COVID-19. Cass and ACT's shipment volume index across the North American Surface modes shows a 15% increase year over year (Y/Y) in their July Freight Forecast.

More specific to truckload's volume forecast, Freight Transportation Research (FTR) reports an amended forecast for 2021.

  • Truckload volume gains are at 6.9% Y/Y.
  • This is down from June’s forecast of 7.9%.
  • The reduction is based on their view of industrial production.

For the dry van segment specifically, FTR forecasts 8.3% growth for 2021 and 2.7% in 2022. Retail is a key industry to truckload volumes as inventory to sales ratio continues at below historical levels. Strong imports and inventory replenishment activities will mean higher demand than historical levels of van and intermodal capacity for the rest of 2021.

Below is FTR's chart showing Y/Y truckload volume forecasts at the monthly level for both 2021 and 2022.

truck-loadings-outlook-FTR | C.H. Robinson

Supply (Class 8 tractors)

Bob Costello, chief economist of the American Trucking Associations (ATA), noted last month in Transport Topics, “As has been the case for some time, trucking’s biggest challenges are not on the demand side, but on the supply side, including difficulty finding qualified drivers.”

Market analysts continue to focus more on the trucking labor environment. And trucking labor is struggling. Understanding the labor situation is not as easy as reading the headlines from the Bureau of Labor Statistics (BLS) as cited in FTR's July report, where BLS figures show a shortfall of 45,100 trucking jobs (~3%) from pre-COVID-19 levels.

Ongoing semiconductor shortage continues
The ongoing semiconductor industry shortage makes forecasting the production of Class 8 tractors challenging. Transport Topics reported Intel's CEO suggesting on June 27, 2021, that the chip shortage will continue to worsen and will not be back to a healthy supply/demand balance until 2023.

According to Tim Denoyer, vice president and senior analyst at ACT Research, “The build plans from the original equipment manufacturers (OEMs) of Class 8 tractors have been raised recently, suggesting 50,000+ incremental units by year end 2021. We anticipate that higher-value products like heavy-duty tractors are likely to be prioritized over medium-duty trucks, and we hear OEMs have made agile engineering pivots to use fewer chips per vehicle.”

If this forecast is realized, the carrier community must still find drivers for these incremental vehicles. It’s unclear if they’ll successfully be seated by the end of the year or sometime in the first half of 2022.

Trucking labor is down from pre-pandemic levels
A portfolio of self-employment and payroll data suggests trucking jobs in the United States are down by 30,000 from pre-COVID-19 levels. Short-haul employment is performing better than long haul. Currently, long-haul trucking is struggling the most and largely carrying the employment gap.

Supply and demand conclusion
Not much has changed in the recent months. Manufacturing of Class 8 tractors is constrained by the semiconductor shortage, the long-haul driver gap from pre-COVID-19 only improves slightly each month, and freight volumes continue to be strong as indicated by continued spot market tension and route guide first/primary tender acceptance rates.

Spot market, committed market and capacity insights

The 2021 truckload spot market continues to be exceptionally tense at a nationwide average and demonstrates low elasticity when a significant disruptive event is imposed regionally or nationally.

The map below offers a regional perspective of the great diversity in tension for the truckload dry van market. Building on the understanding that each market has its base level LTR tension, this month's map offers an additional insight.

Areas south of the blue line are experiencing greater spot market tension than regions to the north of the line. The highest import volumes currently entering the country are in Southern California ports, Southeastern ports, and at the Mexico/U.S. border. This trend remains strong and is forecasted to last until the end of 2021.

Couple the import volumes in this region with produce harvest season and it’s easy to see why the LTR is higher in the southern part of the country. Especially amidst a truckload capacity shortage of roughly 30,000 trucking jobs.

LT-ratio-map

As Q3 progresses, produce season will migrate North with the growing season, causing some shifts in current market tension. Keep in mind, when it’s not produce season, many refrigerated trailers are used for dry van loads with the refrigeration unit turned off. As most fresh produce requires refrigeration, produce harvest season will cause demand to rise for refrigerated capacity, so these assets will once again prioritize refrigerated loads over dry van shipments.

When planning for Q3, also remember the yellow markets are still under meaningful tension since a 5:1 LTR is considered reasonably out of balance.

Spot market truckload rate per mile forecast
C.H. Robinson’s forecast for the spot market truckload rate per mile remains largely unchanged and continues to predict the atypical trend upward in cost through the end of the year. Ongoing monitoring of market fundamentals—including the economy—will lead to an updated forecast later in Q3.

Contract truckload environment
The spot market is a leading indicator of the broader and much larger contract/committed market. The contract market is managed in shipper, carrier, and broker transportation management systems (TMS), and not publicly available from spot market trading platforms, therefore, it is difficult to track its performance.

What follows are some perspectives and notes on today’s contract truckload environment:

Routing guide depth

The chart above from TMC, a division of C.H. Robinson, reflects weekly route guide depth (RGD) regionally across the United States through the week of July 12th. A decrease in RGD means there are fewer rejections of tenders to the primary supplier (measured by first tender acceptance (FTA) and presented as a percentage of tenders accepted by the primary supplier), which in turn means fewer subsequent tender rejections to backup suppliers.

Route guide performance
Waterfall route guides are commonly used to manage awarded freight on lanes with some level of demand pattern predictability. The following insights are derived from C.H. Robinson’s large shipper portfolio of diverse industries across the United States.

Two key metrics of route guide performance are first tender acceptance (FTA) and route guide depth (RGD). RGD refers to how far into a route guide a shipper must tender shipments before loads are accepted, or the average number of tenders per load. FTA is a percentage of how often the awarded primary transportation provider accepts shipment tenders.

During the week of July 12, 2021, the overall RGD across all regions was 1.74, which presents a continued improvement since the beginning of March when it was 1.93. First tender acceptance for June dropped to 80% from May’s 81%. Through the first half of 2021, FTA has held steady in the range of 80–81%. The improvement of the RGD suggests some increased elasticity in the truckload market as backup transportation providers accept tenders more frequently.

A regional view of RGD shows some stabilization of 1.7 to 1.8 for the Midwest, Northeast, and South. The West continues to perform well at 1.4.

For 2021, the middle distance loads of 400–600 miles and loads over 600 miles have bounced around at 1.8 to 2.0. May resulted in the middle mile segment rising to 1.96 and long distance at no real change of 1.85. For perspective:

  • Short haul (less than 400 miles) showed increased tension and slipped from ~1.4 to almost 1.5, returning to February 2021 levels.
  • Middle distance (400–600 miles) improved slightly to ~1.85 from 1.9.
  • Long distance (over 600 miles) continues to hold steady at ~1.75.

Voice of the carrier from C.H. Robinson
Every month we conduct business reviews with contract carriers. Here are some of the comments that are informative of the current market:

    Labor and hiring
  • Driver wages continue to rise
  • Lifestyle improvement strategies include more home time, less dwell time, and shorter length of haul
  • Growing focus on dedicated routes to offer predictable driver pay and home time
    Accessorial charges
  • Carriers are firm on charges and collection of those charges
  • Carriers may withhold capacity to locations with unresolved dwell issues
  • Largest carriers are the most aggressive on increasing accessorial charges
    General capacity insights
  • Most carriers report being overbooked
  • Carriers seek dedicated awards and lanes with predictable demand patterns
  • New equipment purchase backlog persists for tractors, trailers, and parts
  • Parking is a top issue resulting in lost hours as drivers seek spots at truck stops, rest areas and businesses.

Ocean and air import volumes impact North American surface transportation

Ocean import demand from Asia to North America via the Pacific and Atlantic continues at historically high levels and is forecasted to be so through Q3 and possibly Q4.

Rail and truck networks at all ports are stretched. The East feels additional stress as it works through the backlog of full and empty container volumes following the Suez Canal reopening.

Air freight imports to North America have relaxed a bit, but "pull forward" bookings are now occurring to beat presumed fall retail inventory build efforts. These forthcoming early bookings will bring some additional demand to U.S. airports, drawing on surface capacity at a greater level than historical patterns.

For a more holistic update on ocean and air in global trade lanes, please see our Global Forwarding Insights.

Temperature controlled shipping

So far, the 2021 produce season follows a traditional produce season, with a “follow the sun” pattern emerging. The Carolinas, Texas, and the Midwest/Upper Midwest are most impacted as the markets shift to these locations.

Rain impacted harvesting in North and South Carolina, resulting in a delay of demand. A material surge with the opposite situation of droughts in the West and parts of the Midwest is slowing produce demand.

Summer also brings “grilling season” as defined by a growth in refrigerated protein volumes out of states like MO, AR, IA, and NE, that continues into the fall.

Expect the heightened tension and overall demand of the 2021 market, plus apparent growing demand of refrigerated transport aligned with “buy fresh” trends, to bring added challenges for temperature controlled shipping. Work with your C.H. Robinson representative for ideas that are aligned with your business and the market.

Flatbed

Aggregate flatbed demand seems to be returning to pre-COVID-19 levels. Available capacity, however, is meaningfully less than pre-COVID-19 as drivers are migrating to dry van equipment due to rising wages and less demanding work.

Successful strategies for today’s flatbed market include leveraging flexibility in pick and delivery windows to manage costs and ensure capacity. This will result in better outcomes than simply planning for longer lead times while remaining inflexible about appointments.

Cross-border shipping (Canada and Mexico)

Intra-Canada shipping

Port of Vancouver rail service has resumed
According to the Port of Vancouver, rail services on the Canadian Pacific rail line affected by the British Columbia interior wildfires resumed July 13, 2021. Both Canadian Pacific and Canadian National trains are sharing the line through affected areas.

A ministerial order issued July 11, 2021, will be in effect until October 31, 2021, placing restrictions on rail operations between Kamloops and Boston Bar, and Kamloops and North Bend, when the fire hazard rating is ‘extreme’. These restrictions limit speeds and require fire mitigation measures. There has been speculation the Lytton, BC, fire was caused by a train.

The Canadian spot market truck to load ratio tightened by 5% in May
The ratio was 53% lower Y/Y. Overall the intra-Canadian and cross-border truck markets are reasonably balanced and healthy. Quite a different experience than intra-U.S and cross border Mexico-U.S. load to truck ratios. Look for an update from Loadlink at the end of July.

Intra-Mexico shipping

Pricing for northbound loads from the center of Mexico to the border continues to be imbalanced, with roughly three northbound loads to one southbound (3:1) load. In 2020, the experience was closer to two to one (2:1). As such, higher costs are associated with repositioning empty capacity for the northbound loads. C.H. Robinson recommends adding flexibility to pickup and delivery dates to increase access to capacity.

Tense spot market LTR in Texas
From Laredo, TX, heading north, the spot market LTR as peaked at 17:1 recently. This compounds the capacity and pricing challenges on northbound freight. Source: https://www.dat.com/

Ongoing dwell time problems in Mexico
Long dwell times in Mexico is an ongoing problem. Many shippers take up to eight hours to load. To avoid this, carriers are withholding capacity and origins with long dwell time histories are now becoming more challenging find carriers.

Rising diesel costs
Like the United States, diesel costs are rising in Mexico, influencing both intra-Mexico and cross-border pricing.

Ongoing B1 Visa migration
Mexican drivers with B1 Visas continue migrating from cross-border services to intra-U.S. services. Work with your C.H. Robinson representative to determine if a crossdock or through service is best suited for your needs.

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Intermodal Shipping

TOP STORY: Decrease in challenging intermodal markets

For information about the Union Pacific temporary container suspension, check out our Client Advisories.

Broadly, intermodal volumes are remaining stable with some recent relaxation that aligns with similar relaxation in July 2020. Volume is expected to remain strong through the second half of the year, with some localized challenges with capacity also continuing.

  • Dray capacity has pockets of limitations, be flexible.
  • California outbound loads face challenges across the country as elevated import container volumes are forecasted to continue.

There is opportunity to accept goods when available and turn trailers/containers as fast as possible to return capacity to the network. Intermodal is open and continues to participate in the broad freight flows and migration of loads in today's market.

Connect with your C.H. Robinson account manager to address strategies that minimize peak season and dwell surcharges.

Less Than Truckload (LTL) Shipping

TOP STORY: LTL carrier shuffle continues

LTL and consolidation

In recent months, two acquisitions demonstrate the strength and attractiveness of the LTL industry as truckload carriers seek to increase shareholder value and get closer to the ecommerce industry. Both acquisitions have continued to operate as standalone brands and operating networks:

  • AAA Cooper: July 5, 2021, purchase announcement from Knight-Swift
  • UPS Freight: April 30, 2021, purchase announcement by TFI International

LTL trends
SMC³ hosted a virtual “Connections 2021” offering LTL trends, technology, and the broad national/global economy. The event discussed how the LTL industry continues to optimize trucks and networks, sending clear pricing signals about what freight creates value for carriers.

Manufacturing continues to strengthen, which is a foundational sector for LTL carriers. Carriers continue to implement optimization strategies for trailers and increase the yield of their fleets by looking at overdimensional freight and shipments that could mode shift to parcel or truckload. There is a primary focus on trapped trailers and long dwell events and either engaging those locations or discontinuing service. Overall, LTL carriers are working to minimize bottlenecks and improve service.

Looking forward, the LTL industry is keenly focused on driver and dock worker recruitment as the demographics of the workforce are affecting LTL much as it has truckload. Ecommerce will continue to grow with LTL carriers that are working to balance final mile and middle mile services. Carriers are seeking partners to improve efficiency—even beyond shippers of choice.

Work with your C.H. Robinson account manager to align your LTL strategy with carriers that have similar goals. Increasingly, it takes a portfolio approach to garner the best services and price.

Small Parcel

How has the market changed?
Consumers have shifted their buying habits to online for items like groceries, meal kits, household staples, etc. As a result of the rapid shift to ecommerce, parcel network capacity has lagged behind demand.

While carriers are migrating to artificial intelligence (AI) and machine learning (ML) to drive efficiencies and reduce costs, many parcel carriers are still running over capacity. They are using the opportunity to charge premium fees for their services. These fees are likely to remain a constant feature moving forward. Lack of network capacity is most evident during inclement weather or other disruptive events.

What does this mean for shippers?
Customer expectations and demands for low or no cost shipping needs to be mitigated by internal efficiencies and carrier cost concessions as well. Clear communication on ship dates, delivery dates, and proactive notifications of delays will be vital in consumer satisfaction.

C.H. Robinson recommends working with best-in-class providers of AI and ML tools. This strategy will be crucial to success in this challenging environment, allowing shippers to generate accurate delivery dates for managing consumer expectations and optimize parcel routes for cost reduction.

Government and Regulations

TOP STORY: Infrastructure package still under negotiation

Congress and the White House continue to negotiate on an infrastructure package. The final package is some time out, with a great deal of negotiation still to occur. Currently, it is not possible to offer insights on the freight policy or timelines that result from the eventual agreement.

U.S. Economy

TOP STORY: Analysts forecast deceleration of the spot market in the second half of 2021: Considerations to keep in mind

C.H. Robinson’s spot market van truckload cost per file forecast suggests sustained tension well above historical norms. As part of that, our forecast predicts pricing that trends away from the downturn forecasted by industry analysts in the second half of the year.

Rather, C.H. Robinson’s forecast continues to show upward pressure on spot truckload pricing through the end of the year. Below are some key points to consider as when reflecting on the varied forecasts.

Broad labor challenges
On the labor side, the evolving Delta and Gamma COVID-19 variants continue to impose more broad challenges broadly to labor and increase downward pressure on the long-haul truck driver population.

Highly transmissible COVID-19 variants continue to emerge amidst the re-opening process and will likely continue as colder weather returns this fall. This will primarily impact supply with continued pressure on the labor market, driving consumer and wage inflation. This is reflected in the strong June inflation numbers.

Demand levels are strong
Strong levels of demand continue to outstrip supply for goods and services, keeping inventory levels of goods low and creating tension for transportation capacity.

With demand looking very robust, the economy is on track for strong growth. Business and retail inventories are low while corporate earnings/capital expenditure projects are robust. Household balance sheets are in good shape with $3T (USD) in excess savings since the start of COVID-19.

To reiterate, inflation in the freight industry last year is now spreading to the broader economy. This causes increased competition for freight jobs from higher paying, and in some cases, more attractive jobs. Expect capacity to remain relatively tight in the second half of 2021. C.H. Robinson’s forecast for spot rate growth for 2021 remains above analyst forecasts for the second half of the year.

The impact of COVID-19 on supply chains and the larger economy
Economically, the United States is not an island. As such, economic and transportation forecasts for North America and the United States require study and involvement of the world situation in the models.

Since COVID-19 variants are much more transmissible (especially Delta) and there are uneven rates of vaccinations around the world, new daily global COVID-19 cases are in the 500K+ range.

The number of new variants is a function of COVID-19 cases and time. The more global COVID-19 cases, the more opportunity that one of these mutations is a more transmissible or dangerous variant.

Shown in the chart below, the WHO first identified the four variants of concern they are tracking, however there are four additional variants of interest and 11 more designated for further monitoring.

 

 

Covid cases

Source: Global New Daily COVID-19 Cases from the WHO

The Delta variant is especially concerning because the measure of transmissibility, the R0, is estimated at 5-8x the original virus. It’s also 2.5x more lethal.

The following figure offers perspective on the increased communicability of the Delta variant. This evolving situation has the possibility of rapid growth and COVID-19 cases that will influence global and likely North American social and economic environments. This is an important perspective because there were many regions of the world not largely effected by the first wave of COVID-19 that are being materially impacted from the Delta variant.

Covid variants

Source: R0 of COVID-19 variants and common diseases from BBC

Revisiting the topic of inflation
June’s core CPI increased 0.9% month over month (M/M) versus the expectations of 0.4% M/M, which puts the United States on track for 6% CPI for the full year. In the chart below, this is represented by the blue dotted line.

This 6% figure is achieved by doubling the six months of growth that the United States has experienced year to date. This is a clear departure from the pattern of a narrow 2% band seen since 2011. This growth is accompanied by an even more aggressive 1% M/M growth for the June Producer Price Index (PPI)

Core CPI

COVID-19 led to initial supply constraints, this, combined with the stimulus jumpstart of the economy is driving most of the inflation. As shown in the CPI, massive inflation across the economy means labor rates rise.

Consider that transportation costs led our recent inflation. They will continue to increase as the inputs to transportation cost structures rise and transportation rates will reflect the inflationary pressure through 2021.

The evolving COVID-19 variants will affect the global economy and inflation. Be mindful of the global economy and supply chain in the second half of 2021 and into 2022 when conducting business and supply chain planning.

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North American Freight Market Insights | C.H. Robinson
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