InTek Freight & Logistics Blog

Falling for Freight Updates

Written by Kevin Baxter | Sep 28, 2023

Fall - or Autumn if you prefer - typically finds us smack dab in the middle of peak freight season. But by now the market has made it pretty clear that no such peak exists in 2023. So where does the logistics and supply chain arena stand as the leaves begin to change? Let's go over a few freight updates to help tell the story.

Where Do Freight Rates Stand?

As fall begins, freight rates remain low. Checking on our Domestic Intermodal Spot Rate Index shows rates continue in the red compared to last year at this time. As of this week's reading, they're down 14.1% to be precise. The DAT National Truckload Spot Rate is down a bit more, at 17.7% lower than this time in 2022. It is worth noting, though, that on the intermodal side, the gap has narrowed a bit over the last several weeks. And on the truckload side, rates did generally tick up from August to September - though the most recent week-to-week data showed the opposite. 

The rate outlook is murky for the coming months, with generally tempered optimism for a slow build back to normal. The latest Cass Freight Index, for example, points to the spring as the time to expect better market conditions - and many in the industry agree. The August Logistics Managers Index moved back into a growth posture after five straight down months, and respondents (made up of logistics pros) registered optimism of continued expansion over the next year.

Still, there are a number of question marks, including  carrier entrances and exits, inflation (and relatedly, the Federal Reserve's handling of interest rates), consumer behavior (to drive greater demand) and diesel prices - with plenty of others floating around as well.

What Is the Weather Outlook?

Freight transportation is certainly affected by the weather, whether it be the need for added refrigeration or more northerly routes when temperatures are elevated, detours away from areas threatened (or hit) by hurricanes or icy conditions slowing down travel. Fall is a season that can include any of those conditions, depending on the location and the year. 

Let's start with hurricanes. The season runs through the end of November, but October is typically the last hurrah for any major storm. It has been an active one this year, as we're already up to Rina - marking 18 named storms (though one of those was "unnamed"). On the flipside, most of those in 2023 have avoided catastrophic impacts, leading to more brief and minor disruptions in affected areas - nothing nearly as bad as last year's Hurricane Ian in Southwest Florida.

The last NOAA forecast anticipated 14-21 named storms for the season, so that would leave three more in the next couple of months - but we're already well ahead of a typical pace. While hurricanes can hit anywhere along the Gulf or East Coasts, development from October on tends to favor Gulf landfall from Louisiana east, with an occasional storm hitting the Atlantic side of Florida. The question for the remainder of the season is whether El Niño keeps development down in the traditional late-season areas of the Caribbean and Gulf, or if warm waters trump its effects.

Beyond hurricanes, the National Weather Service anticipates equal chances normal to above normal temperatures the rest of the year for a large swath of Middle America (including North Dakota and Montana, all the way southeast to much of Mississippi and Alabama). The rest of the country sees elevated chances of elevated temperatures. The vast majority of the U.S. is likely to see average precipitation, with Texas up to Southern New England seeing a likelihood of above normal precipitation. Only a small pocket of the Northwest is expected to see below normal precipitation. 

What Is the Labor Situation?

After months of unrest on the labor side of the freight industry, things appear quieter following agreements at the West Coast and Canadian ports and with UPS. That doesn't mean there aren't conflicts still lingering. Perhaps the highest profile are the United Autoworkers (UAW) strikes against Ford, GM and Stellantis, which affect not only the automakers themselves, but parts suppliers - certainly heavy users of freight volume. Some experts are already worried about the effects on transportation.

In Mexico, news of a potential truck driver strike spread in late August, but a temporary détente was reached, postponing any potential action for a few months. Also worth watching is any sign of activity relating to the U.S. East Coast ports, whose union workers have their own labor contracts coming up next year. Still, this fall appears to be relatively more peaceful on the labor front in supply chain circles than any period in the past couple of years. 

Looking for freight solutions this fall - or beyond? Fill out our quick form and we'll be happy to follow up to discuss your business needs. For more information about InTek, or logistics and supply chain issues in general, check out our Freight Guides.